A tax credit for leased electric vehicles is subject to laxer rules than those that apply to purchases of new EVs.
Consumers can get a $7,500 tax credit for buying a new EV. It may be challenging for cars and/or buyers to qualify due to certain requirements.Maskot | Maskot | Getty ImagesBut many auto dealers are also passing along a $7,500 tax break to lessees, via a different mechanism called the "qualified commercial clean vehicles" tax credit.
That's because leasing is qualified as a commercial sale under the Inflation Reduction Act, according to Barclays. With a lease, the carmaker technically sells the vehicle to a leasing partner, which is the one transacting with consumers. The $7,500 tax credit enables dealers to charge low monthly payments for leases, thereby helping "stoke demand" for EVs, Barclays wrote. In 2024, dealers have leaned more heavily on such leasing promotions, in the form of subsidized monthly payments, analysts said.
For example, leasing ensures car users always have a new vehicle, and also offers "a great glide path" for consumers to determine whether EVs are right for them, without much risk, she said.
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