Hybrid Cars Becoming More Popular as Gas Prices Soar - Tax Credits Coupled with Higher Fuel Costs Make Hybrids In Demand

April 22nd 2006

Toyota Prius

As gas prices continue to rise, purchasers of new cars are looking a little closer at the hybrids. Some areas around the country have seen the price of self-serve regular hit the three dollar mark, and above. Analysts say the price hike is due to hurricanes Katrina and Rita, instability in Nigeria, and the addition of ethanol to the fuels.

All of the major networks including ABC, CBS, NBC and CNN have run stories on the high cost of gas, and new wave of hybrid cars becoming available. The only problem is that dealers are selling out of these new cars faster than they are getting them in. ABC News Nightline correspondent John Donvan interviewed some car salesman that say they are lucky to have one hybrid on the lot at any time. The dealers may have hundreds of traditional gas-only cars, but only a small number of hybrids.

So how can hybrids save you money? First off, hybrids are not an alternative-fuel vehicle. They run off regular gas from the local filling station. Hybrids incorporate an electric motor that is charged by the gas motor. The efficient hybrid also uses the braking system to help charge the batteries.

Unlike electric cars, you don’t need to plug the hybrid into your house-current at night. The cars incorporate a flexible drive-train that turns off the gas motor at idle. This gas savings can be especially helpful in stop and go traffic.

This year the Federal Government is offering a tax credit with the purchase of a hybrid. Last year the Feds offered a less appealing tax deduction. Each car manufacturer has a limited number of credits available, so it is possible some will run out by the end of the year.

The tax credits vary according to car. Typically, the more fuel efficient cars will get the larger credit. These credits, coupled with the fact that gas prices have been sky-rocketing, may make this the year of the hybrid car.