With gas prices on the rise and the Federal Government offering tax credits, this may be the year to buy a hybrid car. Hybrids do cost more money up front, but over time buyers can expect to save, especially if gas prices continue to rise. Those with a long commute will likely save more than those who use the car less.
The tax credits are not the same for every vehicle, and not all hybrid cars qualify for a tax credit. Do your homework before you purchase your hybrid to make sure. Owners may also save on auto insurance. According to www.kanetix.ca, drivers in Canada who are looking to save money at the pumps might also find they can save money through their auto insurance. Automotive Body Repair News (ABRN) magazine says US buyers might be able to save as well. In a May 12th article, ABRN says some insurers now even offer special discounts for hybrid vehicles.
Whether your reasoning is to help the environment or to save money, hybrids might be able to do both. The Department of Treasury (IRS) has announced how much money buyers can expect to save on their taxes when they buy a hybrid.
Here is the lineup for Ford Vehicles:
2006 Ford Escape Hybrid Front WD- $2,600
2006 Ford Escape Hybrid 4 WD - $1,950
2006 Mercury Mariner Hybrid 4 WD- $1,950
Here is the lineup for Toyota and Lexus Vehicles:
2005 Toyota Prius - $3150
2006 Toyota Prius - $3150
2006 Toyota Highlander 4WD Hybrid - $2600
2006 Toyota Highlander 2WD Hybrid - $2600
2006 Lexus RX400h 2WD - $2200
2006 Lexus RX400h 4WD - $2200
The above list does not include all hybrids that qualify for a tax credit, but only the ones that have specific values disclosed. According to a January 14th IRS press release, buyers of vehicles that run off fuel cells, natural gas, liquefied natural gas, liquefied petroleum gas, hydrogen, or any liquid that is at least 85 percent methanol may qualify for a tax credit. The maximum allowable credit for vehicles weighing 8,500 pounds or less is $4,000.
Each automaker is allowed just 60,000 tax credits total. In other words, the credits are available for the first 60,000 hybrids delivered to their dealerships. Toyota may be the first to run out of tax credits. Some insiders say they could deliver 60,000 hybrids by the end of September.
So if you want to take advantage of the tax credits, buy early. The tax credits will be phased-out over a 15-month period. Also, it is unclear whether leasing a vehicle will qualify you for a tax credit. According to hybridcars.com, the tax law probably does not allow a taxpayer to lease a qualifying vehicle, but some language in the Energy Act's provision about the tax credit make mention of "lessor."
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