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5 Reasons to Buy a Hybrid

        Auto | Hybrid Cars

4
Tax Incentives
U.S. Senator Bill Frist (R-TN) argues in Washinton, D.C., for expanding tax incentives to promote the use of hybrid vehicles.
U.S. Senator Bill Frist (R-TN) argues in Washinton, D.C., for expanding tax incentives to promote the use of hybrid vehicles.
Joshua Roberts/Getty Images

In the United States, one of the biggest pushes that hybrid cars have received has been in the form of tax incentives from the federal government. Ever since the U.S. Congress drafted the Energy Policy Act of 2005, new hybrid car owners have been able to get a special tax credit after making their purchase. Just how big can the tax credit get? Up to $3,400, which, for many taxpayers, is a significant sum.

There are, however, a few qualifications buyers should be aware of. To get a tax credit, the driver needs to have purchased the hybrid car on or after Jan. 1, 2006. Any earlier and you can't get the credit. You also can't wait until after Dec. 31, 2010 to make your purchase, which is when the act will expire.

The specific amount of credit you'll receive also depends upon a schedule, determined by the number of hybrid vehicles a manufacturer sells. For instance, if you purchase your hybrid before the manufacturer sells its 60,000th vehicle, you should be able to get the full credit for that specific car. After the 60,000th model is sold, however, the credit starts to gradually phase out on a quarterly calendar schedule. You can read more about the hybrid tax incentives at fueleconomy.gov.


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