Tax Credits for Hybrid Vehicles

If you or your business is looking for a tax break, then purchasing a hybrid vehicle could provide a credit on your 2008 IRS bill.

You can find information on the available tax credits for different models available from the manufacturers that currently sell hybrid vehicles at the Government Fuel Mileage Site. However, you need to be sure to check on the current sales figures for specific models because the tax credits begin to decrease after 60,000 units have been sold by the manufacturer. The tax credits actually drop to nothing over the next several months after that 60,000 benchmark is reached.

Once the tax credit is decreased or eliminated you will need to evaluate whether the higher purchase price and maintenance costs will save you money as opposed to a conventional vehicle. For example, our analysis of the total cost of ownership for a Toyota Prius versus a similarly equipped Ford Focus found that the Focus was less expensive to own over five years (excluding a tax credit).

This article gives an excellent review of the parameters to be considered when comparing the cost of a hybrid versus an all gasoline powered vehicle: quamut.com .

Also, be sure that if you lease a hybrid, you receive a discount commensurate with the available tax credit. The law is written so that the leasing company keeps the tax credit.

Again, that primary link is: Government Fuel Mileage Site.