Millions of Americans Could Get Rebate on Car Payment

Michigan residents could soon get up to $2,500 for purchasing a car under the "MI Vehicle Rebate," the new program aims to increase sales of electric, hybrid, and traditional combustion vehicles.

"MI Vehicle Rebate will save you money on your new car as you walk out of the dealership with your keys," Michigan Governor Gretchen Whitmer said in a statement. "Michigan's auto industry is the backbone of our economy, and this year, the hardworking men and women of the UAW and our world-leading automakers negotiated and ratified a record contract.

"Now, let's keep making the world's best cars and trucks while lowering costs for families by thousands of dollars. Together, we will build and lead the future of mobility and electrification.

The state said the rebate is anticipated to lower the cost of a new vehicle by between $1,000 to $2,500.

"The future of cars, batteries, and tech is being made in Michigan," Lieutenant Governor Garlin Gilchrist II said. "The MI Vehicle Rebate plan will lower costs for families, spur vehicle manufacturing, and support both our world-class auto workers and our automakers."

Alongside other federal rebate programs, Michigan residents could save a whopping $10,000 when buying a new car. That's because federal rebates allow you to bring in $7,500 extra for the purchase of most electric vehicles.

There are different amounts of money available, however, depending on what type of vehicle you purchase. If you opt for a new battery electric or hybrid car and it's manufactured by a facility represented by an automotive union, you can expect $2,500 extra in your pocket.

A new battery electric vehicle or hybrid vehicle made anywhere nets a $2,000 rebate, while those who choose a new internal combustion vehicle will get slightly less.

"This substantial saving makes electric and hybrid vehicles more accessible and affordable for a broader range of residents," Zack Hellman, the owner of Tax Prep Tech, told Newsweek. "The rebate plan is designed to lower the cost of both electric or hybrid vehicles and traditional combustion vehicles, making it more feasible for many residents to purchase new vehicles."

If your traditional vehicle was made in a facility represented by an auto union, you can earn $1,500 back, while those who buy a new internal combustion vehicle more broadly can expect $1,000.

No used vehicles would be included under the rebate, however.

To fund the new program, Whitmer will be asking for an extra $25 million to be allocated toward the rebate.

While the rebate program benefits residents whether they choose a traditional or electric vehicle, the EV industry is set to see a significant sales uptick due to the increase in rebates for these vehicles.

"By incentivizing the purchase of EVs and hybrids, the rebate is likely to boost sales in these categories," Hellman said. "This can lead to increased demand for electric vehicles, spurring growth and innovation in the EV sector."

Michigan could also see a more general boost to the local economy as vehicle sales surge and the auto industry has more money go into it.

"The rebate can stimulate the local economy by increasing vehicle sales and supporting the auto industry, a crucial sector in Michigan's economy," Hellman said, adding there's an environmental benefit as well.

"By promoting the adoption of electric and hybrid vehicles, the plan contributes to environmental sustainability efforts, such as reducing emissions and fostering clean energy transition," he said.

Michigan isn't the first state to incentivize the purchase of electric vehicles.

California also provides rebates for new all-electric or plug-in hybrid electric vehicles, while Colorado also offers tax credits up to $10,000 for electric vehicles.

In Connecticut, residents can earn rebates specifically for hydrogen and electric vehicles. Florida and Illinois offer similar deals to residents as the states look to encourage electric vehicles and reduce emissions.