There are few things smoother than driving an electric vehicle (EV). The quiet idling, seamless acceleration, and clean emissions have earned EVs a growing fanbase, and here in Colorado, the enthusiasm for a cleaner, more efficient way to drive is stronger than ever. If you’ve been considering a zero-emission vehicle, which includes both fully electric and plug-in hybrid electric vehicles (PHEVs), the time to act is now. A special window of opportunity is open, offering some of the best lease deals we’ve ever seen. But the clock is ticking. 

The federal $7,500 EV tax credit is set to expire on September 30, 2025, and Colorado’s generous state tax credits are also on the table. For most buyers, the path to claiming these incentives has become complicated. However, for those who choose to lease, significant savings are still in reach. This blog will explain why leasing is the smartest move you can make right now, how these incentives truly work, and how we can help you take full advantage of them before they’re gone. 

The Federal Tax Credit Loophole: How Leasing Gets You the $7,500 

For a long time, the federal $7,500 tax credit was a major incentive for anyone purchasing a new EV or PHEV. However, that credit has become much more restrictive, with strict rules about final assembly, battery sourcing, and income limits that make it difficult for many buyers to qualify. 

Here’s the good news for lessees: A special provision for leased vehicles classifies them as a commercial sale under a different section of the tax code (Section 45W). This is a huge benefit for you, the driver, because it means: 

• No Income Limits: The commercial credit has no income caps, so more people are eligible. 

• No Battery Restrictions: The strict battery sourcing and final assembly requirements for new car purchases do not apply to commercial leases. 

• More Models Qualify: This exemption means a wider variety of fantastic EVs and PHEVs on the market are eligible for the credit. 

While many individuals are no longer able to claim this credit when they buy a car, leasing still opens the door. We work with our clients to make sure this credit is reflected in your lease agreement transparently and correctly, putting the savings in your pocket. 

Interested in finding the best EV lease deals in Colorado? Speak with one of our expert auto brokers today.

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Colorado EV Tax Credits: A Bonus Worth Up to $6,000 

Our state loves EVs, and to show it, Colorado offers some of the most impressive state tax credits in the country. For Colorado taxpayers, there’s a $3,500 state credit for leasing a new EV  or PHEV with an MSRP up to $80,000. For more budget-friendly EVs priced under $35,000, you could qualify for an additional $2,500 credit, bringing your total state savings to $6,000. 

An excellent local tip: Many dealerships allow Coloradans to apply these credits as a point-of-sale discount, which can significantly reduce your upfront cost. Our team is here to walk you through how to apply your state tax credit and even stack it with other local rebates, all as part of a seamless and stress-free process. 

Local Utility Rebates & Incentives 

The savings don’t stop with federal and state credits. Here in Colorado, many utility providers offer cash rebates that can make EV and PHEV ownership even more affordable. Providers like Xcel Energy, Black Hills Energy, and San Isabel Electric Association often have incentives for: 

• EV and PHEV purchases.

• Home charger installations.

• Income-qualified households.

Some income-qualified households can receive up to $5,500 in additional utility savings. We also have specialized local programs like Vehicle Exchange Colorado (VXC) for income-qualified drivers who want to trade in their older vehicles for a new EV, with rebates up to $6,000.  

Is the Tax Incentive Worth it for Used EVs?

For those on a tight budget, a used EV or PHEV might seem appealing, especially with the $4,000 federal credit available on used EVs under $25,000. However, the inventory is limited, incentive eligibility can be strict, and the overall savings may not compare to the stacked incentives of a new lease. For many, leasing a new EV or PHEV provides greater value and fewer hassles, giving you a fresh car with a full warranty and the latest technology. Our team can help you compare new lease options versus used EVs to see what makes the most financial sense for your situation. 

Find The Best EV Lease Deals at Centennial Leasing & Sales