Tax Credits For Purchasing A Hybrid

If you need another reason to purchase a hybrid vehicle, how about a tax credit?

Hybrid Tax Credit Eligibility

Beginning back in 2006, the purchase of a hybrid vehicle became eligible for up to $3,000 in Federal Tax Credit. A tax credit is subtracted directly from the total amount of federal tax you owe, thus reducing or even eliminating your tax obligation.

There is just one small catch: how much of a credit you can receive depends upon how many units a given manufacturer has sold. Once a manufacturer reaches 60,000 eligible hybrid vehicles, the credit is cut in half. One year after that, the credit is cut in half again. Six months later, the credit is gone.

The bad news: if you had your heart set on a Toyota Prius, it’s too late to receive a credit for that model—350,000 units were sold in 2007 alone. Interested in a Honda hybrid, such as the Accord? You have until the end of 2008 to receive a credit that may be as little as $162.50.

The good news: there are new models coming out all the time, including the 2008 Nissan Altima hybrid. Your also in luck if you are shopping for a Ford or GM hybrid. According to, all hybrids from Ford and GM, as well as the new Altima, still qualify for the full tax benefit. To assure yourself that you receive the maximum credit, make your hybrid purchase sooner rather than later.

Differences Between Styles

Not all variations of a model carry the same level of tax credit incentive. According to information found on the website, the 4-wheel drive versions of the 2009 Ford Escape and 2009 Mercury Mariner currently are offered with a tax credit of $1,950, while the 2-wheel drive versions of the same vehicles have a $3,000 credit available. For the most current information about the amount of incentives available, vist


Mercedes-Benz and Volkswagen each offer 2009 diesel models that also qualify for a tax credit. For example, the purchase of a 2009 Mercedes-Benz GL 320 BlueTEC qualifies you for a $1,800 credit. The 2009 Volkswagen Jetta TDI Sedan carries a $1,300 tax credit incentive.

If you live in New York or California, Honda offers an alternative fuel vehicle that qualifies for a $4,000 tax credit. The 2009 Civic GX boasts an engine that runs on compressed natural gas. Currently, there are no published plans to offer this model in the Midwest.

Find a Hybrid

For more information about the availability of hybrid models, including pricing, reviews, and photos, visit the CarQuotes Hybrid.

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