How to Get Cash for Buying a Hybrid
Purchasing criteria set them apart from regular gas-powered vehicles.
Who drives a hybrid? The list includes members of the Hollywood elite (Rob Reiner, Cameron Diaz and Danny DeVito), the who's who of Washington D.C. (Hillary Clinton, Barack Obama and John Kerry) and regular folks across the country. Want to join them? Hybrids have their own criteria, which are crucial to know.
A hybrid (short for hybrid electric vehicle) uses two power sources: a gasoline-powered internal combustion engine and a battery-powered electric motor. The electric motor assists the traditional engine to make the vehicle more fuel-efficient.
Your Hybrid Choices
The most popular, and certainly the most recognizable, hybrid is the Toyota (Stock Quote: TM) Prius, which gets a combined 46 miles per gallon and starts at about $22,000. The Honda (STOCK QUOTE: HMC)) Civic Hybrid runs $23,550, but gets only 42 mpg combined.
The Ford (STOCK QUOTE: F)) Escape Hybrid, meanwhile, is the most fuel-efficient SUV on the market. The hybrid Escape gets a combined 32 mpg and starts at $29,305. Smaller hybrid SUVs like the Lexus RX 400h and the Toyota Highlander Hybrid don't score as well in the fuel efficiency category. Both get 26 mpg combined. The Lexus, marketed as a luxury SUV, starts at $43,480, and the hybrid Highlander starts at $34,700.
Even huge SUVs are going hybrid. The Chevrolet (STOCK QUOTE: GM)) Tahoe Hybrid and the GMC Yukon Hybrid both claim a combined fuel efficiency of 21 mpg. That doesn't sound like much, but it represents a 40% increase over comparable non-hybrid models. Both vehicles start at just over $51,000.
The Dodge Durango Hybrid and the Chrysler Aspen Hybrid define a new class of hybrid: the hybrid hemi, for drivers looking for the power of a hemi engine with a little less pollution. The Durango and Aspen both get a combined 19 mpg, compared with the non-hybrid models' 13 mpg for city driving, and start at just over $44,000.
Finally, there's the Cadillac Escalade Hybrid, the only hybrid eight-passenger luxury SUV. The Escalade gets a combined 20 mpg and starts at $72,865.
The cost of a hybrid may seem steep. A hybrid Toyota Camry, for example, costs about $7,000 more than its non-hybrid counterpart. Incentives may make the cost a little more manageable. Hybrids bought or put into service after Dec. 31, 2005, may be eligible for a federal income tax credit of up to $3,400. Toyotas are no longer eligible for this tax credit -- the credit is phased out once the manufacturer has sold more than 60,000 eligible vehicles -- but popular hybrids like the Ford Escape Hybrid are still eligible for a $3,000 credit.
In addition, some states and cities offer incentives for hybrid owners. Oregon, for example, gives an income tax credit of up to $1,500 to residents who purchase qualified hybrid vehicles. Tax credits for Colorado residents range from $1,947 for a 2008 Toyota Camry Hybrid to $13,779 for a 2008 Lexus LS 600h Hybrid. Other states, including Washington, New Mexico and the District of Columbia, waive the excise tax on hybrid vehicles.
Some employers offer their own financial incentives. Employees of outdoor apparel company Patagonia and law firm DLA Piper USA LLP can receive up to $2,000 for the purchase of a hybrid. Timberland and Bank of America will reimburse employees $3,000 for the purchase of a hybrid. Full-time U.S.-based Google employees who buy a vehicle with an EPA rating of 45 mpg or higher are eligible for a $5,000 bonus. Clif Bar also hands out $5,000 checks to employees who buy hybrids. And Integrated Archive Systems, a California IT company, offers a $10,000 hybrid purchase subsidy to full-time employees who have been with the company for at least one year.
If your city, state or employer doesn't offer any incentives to help offset the cost of purchasing a hybrid vehicle, look for a used model. Used cars don't typically qualify for federal, state or municipal incentives, but they can still be a great deal. The Kelley Blue Book value of a 2004 Toyota Prius in excellent condition is $15,235
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