Is Colorado's EV incentive worth it?

I wasn't even looking for a new car when my coworker told me, "You can lease a Nissan Leaf for like $20 a month." That sounded too good to be true. Spoiler alert: it was. How are electric vehicle leases so cheap here in Colorado?

I saw an ad on my local dealership's website which basically said the same thing: 

OK, $50 is more than $20, but that still seems like a good deal. And this is the "Plus" model which has more range, more features, etc. I had a used 2020 Nissan Versa I was making payments on for two more years. Before considering the Leaf, I just intended to pay the Versa off and keep it until the wheels fall off.

The lease deal sounds too good to be true, and it's only available because of a $7,500 federal tax credit and a $5,000 Colorado tax credit. When you lease it, the dealership handles all that paperwork to claim the benefit and allow you to get this cheap lease. But is it personally financially beneficial?

Aside from my Nissan Versa's $360 monthly payment, I had to consider the cost of:

• Gas
• Oil changes
• Insurance
• Potential mechanical problems
• Depreciation as I own it 
• Registration renewals
• Interest on the loan (3% interest rate)

When considering the Nissan Leaf, aside from the monthly lease payment, I had to consider the cost of:

• The down payment (which wasn't $50 as advertised for *hand waves* dealership reasons)
• Insurance
• Registration
• Cost of electricity to charge it (~$230/yr)

No maintenance besides tire rotations, and I have to give the car back in two years with under 20k miles. That all sounded pretty agreeable.

So the plan was set: lease the Leaf (which ended up being $118/mo because of *hand waves* dealership reasons?) and then save the difference from my typical monthly payment ($360 - $118= $242) and invest it to buy a car for cash in two years. That fund will have just over $7k in two years according to interest calculators, which is enough to buy a tooling-around-town car outright. 

The End

Just kidding. I thought I had it all figured out, but there was a nice surprise waiting for me when I eventually registered the EV with the DMV: a juicy $1k registration fee. I was expecting it to be comparable to the Nissan Versa, but in hindsight that was foolish. The EV is twice the weight, and part of the fee is based on weight. Additionally, because you don't pay gas taxes, the state is going to get that tax money from registration fees. 

Fortunately, even with that surprise, I'm still coming out ahead, just not as much as I thought. Plus I've really enjoyed driving it! It drives smoothly, accelerates quickly, is convenient to charge at home, remote-start from my phone is killer, and it's got a surprising amount of cargo space. Maybe in two years, I'll buy a cheap older Leaf with the money I save.

If you're interested in getting an EV anytime soon, there's no time like the present! Don't expect these tax credits to be around forever.