Hybrid Cars and Tax Credits

 

Yesterday I was asked about federal tax credits how one may be eligible for when they purchase a Hybrid Car. So I did a little research and here’s what I found.

The federal government (IRS) will give a tax credit for qualifying vehicles,  hybrids and vehicles powered by alternative energy fuels such as natural gas and diesel. The credits are offered to encourage people to buy fuel-efficient and alternative fuel cars. Once a manufacturer’s vehicles sells a total of 60,000 eligible hybrid and diesel vehicles starting from January 1, 2006 the tax credit will phase itself out.  In addition to the phase out, any vehicle purchased after December 31, 2010 will not be eligible for the credit. The federal tax credits can be used only by the original owner and will not help the person who leases one of these vehicles. 

In essence, all the popular gas saving Hybrids have had their tax credits phased out. The Honda Civic and Insight, the Toyota Prius, the Ford Escape and Fusion have all had their tax credits expire.

What has not expired is the great value and fuel economy that  these vehicles produce. The savings is well worth the purchase price as these gas misers have dropped in price substantially since they hit the market about 10 years ago. For instance a 2010 Honda Insight 4 door Hatchback has an MSRP of just over $22,000. For comparison purposes, a 2010 Honda Civic EX  and the Ford Focus SEL both sell  for nearly $21,000. So next time you are car shopping, don’t leave the Hybrids out of contention just because the tax credit has expired.  The real incentive one receives is the fuel economy rated by http://www.fueleconomy.gov .

Regular Gasoline 40 City 41 Combined 43 Hwy

MPG Estimates from Drivers Like You
	Average based on 15 vehicles.   46.3   Lo   40   Hi 58 View Individual Estimates

How likely are you to purchase a Hybrid vehicle?

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