Tax Deductions and
Credits make the Hybrid Cars More Appealing
November 22nd 2005
Anyone buying a car should consider all of their options.
Should they concern themselves with gas mileage or do they have a
large family and need a large vehicle? If you have a long commute
and drive solo or with a coworker to work, you should consider the
Why are hybrids becoming so popular? There are a number of
reasons. First the carmakers have figured out how to capitalize on
their efficiency. Toyota developed a very efficient technology,
patented it, and now licenses it Ford Motor Co and Nissan Motor
There is another big advantage to the hybrid: You donít
need to plug it in. The car charges itself and even uses the
braking system to produce electricity to charge the batteries. You
donít need special filling stations like you would if you owned a
car run on natural gas or hydrogen. Hybrid cars could be the wave
of the near future.
Letís get back to the long commutes. If you have a long
commute the hybrids will perform just like regular gas motors except
you will need less gas to run them. This will save you money. Some
motorists, depending on the commute, could save $1000 or more per
year using the hybrid.
Hybrids do cost more. They may cost you an extra $3000.
So if you can save $1000 a year on gas it would take you as little
as three years to break even on your investment.
Currently hybrid purchasers can get a $2,000 tax deduction
on their taxes. This means if you make $60,000 taxable income per
year you will only be taxed on $58,000. You may save a few bucks on
Tax deductions are not as good as tax credits. Starting
January 1st Congress has increased the incentive for
Americans to buy hybrid cars by offering a tax credit. This means
if you get a $2,000 tax credit you will save $2,000 on your taxes.
So if your tax bill comes to $10,000 you will only have to pay
The details have not been worked out and it is likely to
vary from model to model. The more fuel efficient the hybrid is the
larger the tax credit. Michelle Mahfoufi of the Shreveport Times
reports that the American Council for Energy Efficiency (ACEEE)
estimates the savings will range from $650 on the Accord to $3,150
on the Prius.
Honda may have made a less polluting vehicle but Toyota
with their Prius has made a more fuel efficient one. This may
change the strategy of the automakers. They may consider fuel
efficiency more important than low emissions. Either way, when
shopping for a hybrid, compare the gas mileages and bring your
Best Syndication Staff Writer
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