Why You May Want to Buy Your Next Electric Vehicle at Costco

When the IRS first announced that electric vehicle purchases could result in a $7,500 tax credit, many consumers were eager to line up to purchase them, despite their higher price tag. But the rules surrounding the federal EV tax credit have become stricter. And as a result, many EVs on the market do not qualify for the credit.

As of April 23, there were no Volvo models that met the requirements for the EV tax credit. But since Volvo has long been a trusted name in vehicles, you may be looking at getting a Volvo EV.

The good news is that if you buy a Volvo EV through Costco, you might enjoy some massive savings. But you'll need to act quickly to benefit from the warehouse club giant's limited-time deal.

Save big on your Volvo EV purchase

Current Costco members can receive $2,500 off a Volvo XC40 Recharge or C40 Recharge, which are both electric vehicles. They can also receive $1,000 off of certain non-electric Volvo vehicles, including the XC90 and XC60 luxury SUV/crossover, and the S90 and S60 luxury sedans. A full list of Volvo vehicles eligible for savings is available on Costco's website.

To qualify for this promotion, you need to have been a Costco member as of May 1. You also need to take delivery of your Volvo by July 31.

Should you buy an electric vehicle through Costco?

It's hardly a secret that buying a car is a very expensive prospect these days. And this especially holds true for EVs.

Find My Electric reports that the average price for the top 10 new EVs in the U.S. is $61,442. Of course, some EVs sell for far less, while others sell for over $100,000. So it's really a matter of what you're looking for.

But either way, it's important to shop around when buying a car to seek out the lowest price. In some cases, that may be Costco -- but do your research first rather than assume.

Of course, one benefit of buying an EV through Costco (aside from near-term savings on Volvo models) is that Costco prides itself on solid customer service. So you may find that using its auto program is your most hassle-free option.

That said, you shouldn't buy an EV through Costco for the express purpose of racking up cash back on your purchase. Costco executive members get 2% back on Costco purchases, including those made online and travel booked through Costco. And many categories count toward that 2% reward. Car purchases, however, do not.

In fact, the Costco executive membership limits you to a $1,000 annual reward for Costco purchases. To get that $1,000, you'd have to spend $50,000 in a single year at Costco. A car purchase could easily help you reach that threshold, but alas, it won't count. But you might still want to look at Costco for your next EV, especially if you're interested in buying a Volvo and you're able to move forward with a car purchase soon.