How the EV Tax Loophole Works in Favor of Accessory Sales

Until September 30th, dealerships have a valuable opportunity to capitalize on multiple benefits and diversify their income streams through the unexpected EV tax credit loophole.

The electric vehicle leasing tax loophole allows dealers to claim the commercial clean vehicle tax credit, up to $7,500, on leased EVs, regardless of vehicle price, buyer income, or battery origin. 

Unlike the consumer EV tax credit—which has strict income and vehicle price caps—this leasing loophole bypasses those restrictions entirely. Many premium EVs (e.g., Rivian, Lucid, Tesla) don’t qualify for the consumer credit (unless you lease them), making this backdoor technique available to all EVs.  

Dealerships have the strategic choice to apply those savings toward the lease deal, however they choose.

Advantage to the Dealership

Loss of interest, policy changes, rising costs, and market saturation all contributed to a marked decline in electric vehicle sales. With the current loophole, dealers can creatively utilize the credit to their advantage, boosting their own profits, generating more business in F&I, eliminating lot rot, and enhancing customer satisfaction. Here’s how:

• Increase Profit Margins: Instead of passing the full tax credit to customers, dealers can keep a portion to boost their profit on each lease. Technically, dealers can keep the entire amount, although most dealers will opt to share the advantage with the customer to maintain a competitive advantage.
• Boost F&I: By strategically using the credit to sell more accessories, dealers will reap long-term benefits in the back of the house by boosting profit for parts and sending more vehicles into the service lane for installation. Once your EV lease customer is in the service department, upsell additional accessories and schedule future service appointments.
• Move More Metal: The EV leasing tax loophole gives dealerships a creative way to boost lease volume by lowering monthly payments. It also attracts buyers who would normally be priced out of buying an EV, broadening your horizons on moving EVs off the lot.
• Exceptional Customer Service: Dealers who want to focus on customer satisfaction, higher CSI scores, positive online reviews, and the like might consider funneling larger portions of the available tax credit back to the customer. Satisfied customers create repeat business, which is invaluable to the future health of the store. 

How to Use Credits to Boost Accessory Sales 

There are two main ways to utilize the EV lease tax credit to sell more accessories at the point of sale. First, dealers can utilize part of the tax credit to offset the cost of popular accessories. From the customer’s perspective, the accessories are thrown into the deal, although the dealership is simply covering the cost of the add-ons with the tax credit. Consider bundling accessories that are hot sellers with items that need to move off your inventory shelves. Protection accessories, for example, are especially popular with leased vehicles since the customer has a vested interest in keeping the car in top shape. You might also offer a certain dollar amount of “free” accessories during the presentation to get your customer started shopping.

Secondly, dealers can use the tax credit margin to preload high-margin accessories and present them as added value to the customer. Market it as a “Tax Credit Bonus Package” or something similar. For example, offer an “EV Essentials Bundle” included at no cost with a lease to boost perceived value and drive accessory sales.

Insignia Group Can Help

Today, accessory sales are better positioned for success as customers research their options. Adding an accessory to the car digitally and viewing it from multiple angles is more attractive than ever. Customers can toy with accessory packages without pressure from a salesperson. Presented correctly, accessory sales will skyrocket along with online car purchases. 

Our integration with major digital retailers covers all your bases and allows for a seamless transition when customers decide to come into the store. Schedule a demo with us today to see how Insignia Group can support your accessory content.