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Hybrid Cars

Should you get a Hybrid?

You can get an income tax credit of $250 – $3,400 for buying or leasing a new hybrid gas-electric or diesel automobile. When it comes time to replace your old, fuel-inefficient vehicle for a new efficient hybrid or low-emissions vehicle, please consider converting your old vehicle into a tax-deductible donation.

Who gets it? Individuals and businesses that buy a new hybrid or diesel car or truck. If a tax-exempt organization buys such a vehicle, the retailer may take the credit. For leased vehicles, the lesser may claim the credit.

What vehicles qualify? Hybrid vehicles that use less gasoline than the average vehicle of similar weight and that meet an emissions standard. “Lean-burn” diesel vehicles also qualify, but only a few diesel vehicles meet the emissions standard (see below). There is a similar credit for plug-in hybrid or pure electric vehicles (which you can power by plugging them into a wall socket), alternative-fuel vehicles and fuel-cell vehicles, but these are not widely available. The vehicle must be in the United States.

How much is the credit? The tax credit amount could range from $250 to $3,400 depending on the fuel economy and the weight. If you buy more than one eligible vehicle, you can get a tax credit for each vehicle.