Who Is Eligible for the Tax Credit

Any United States citizen that purchases a hybrid car between 12/31/05 and 12/31/10 will be eligible to claim this one-time credit. The credit only applies to the original buyer of the vehicle. If you buy your car used, you don't qualify for the hybrid incentives. The new vehicle must have been purchased to be used by the taxpayer that is claiming the credit, and must be driven primarily in the United States.

How Long the Credit Lasts

The hybrid car tax credit will slowly be phased out when the manufacturer has sold more than 60,000 of the eligible vehicles. The way it will work is that once the manufacturer has hit that number, the current and the next quarter, taxpayers will be able to claim the full credit. For the next two quarters, taxpayers will be eligible for 50 percent of the full credit, and for the last two quarters they will be able to claim 25 percent. After that, the credit will be phased out.

The sooner you buy your new hybrid vehicle, the larger tax credit you will be eligible for. As of February, 2010, Toyota and Honda no longer qualify. Ford hybrid cars were phased out completely as of the first of April, 2010. Mazda, GM, Nissan and Mercedes still have tax credits available. You may be seeing more diesel run vehicles on the road. That's because the hybrid incentive also carries over to vehicles that use diesel fuel. These tax credits will all be phased out by January 1, 2011. 

Special Rules for Plug-in or Electric Hybrids

If you purchased a plug-in hybrid during 2009, you might have found yourself eligible for a federal income tax credit of as much as $7,500, depending on the capacity of the battery that powers the vehicle. If you purchased a plug-in hybrid after 2009, you might still be eligible for a tax credit of up to $7500, but again, the amount of the credit is dependent on the battery that powers the vehicle. 

How do I Claim the Credit?

If you purchased a vehicle that is eligible for one of the hybrid incentives, you will need to fill out the appropriate form with your federal income taxes. You will then need to report the credit on your Form 1040 when you file it. To claim an electric hybrid or a plug-in hybrid, file form 8834. For other hybrids, including diesel, use form 8910. You will need to make sure you carry the credit over to your 1040, but after that, you're done.

Related Questions and Answers

There is little difference between hybrid car tax deduction and the diesel hybrid car tax deductions in terms of principle. However, the trending pattern does appear to be that the tax credited to a diesel hybrid is less than that credited to a hybrid. The biggest deduction in tax with a hybrid is the Ford Fusion Hybrid, coming in at $3,150. Meanwhile, the most significant tax deduction on a diesel hybrid is $1,800. You would benefit from this if you purchased either a BMW X5 xDrive35d, or the Mercedes GL 320 Blutec. If you were to buy either of these models, the BMW would cost at least $44,220 and the Mercedes a staggering $58,200 before the tax deduction.

On entering 2011, the best hybrid car tax incentive is on the Ford Fusion Hybrid. With a tax credit of $3,400, it surpasses the much talked about Toyota Prius, which has a modest $3,150 tax credit. The reason that tax incentives are being given on hybrid cars are to entice new car buyers to trade in their dirty petrol and diesel models. These are damaging the environment and contributing to global warming. They're coming out with a cleaner, more fuel-efficient hybrid model. If you are interesting in buying a Ford Fusion Hybrid, then it would set you back $19,280 brand new, making it $16,130 once the tax has been credited.

Hybrid

Hybrids are the newest round of cars that have hit the market. They have been out for nearly a decade, and only keep growing in popularity. This is mostly due to the rising global warming and pollution issues, something that hybrid makers claim to combat. Another reason why people are in awe with these vehicles are the hybrid fuel efficiency numbers that are possible. Hybrid MPG ratings are well beyond that of the best gas and diesel engines. An example hybrid miles per gallon number is 51, which happens to be the fuel economy for the Toyota Prius for highway mileage. The hybrid engine is the key to why they are so fuel efficient. A hybrid engine is comprised of two motors, one being a gasoline engine, and the other an electric motor. This does cause a loss in power since the electricity cannot produce that much horsepower. However, since it does have the gasoline component, the hybrid can still hold its own on the road. Hybrids also tend to be lightweight, small cars with nice aerodynamic designs. All of these features go into why they can be so fuel efficient. 

Gasoline

Gasoline engines are the most popular engines on the road, if not just because they are the most numerous out there. Gasoline is actually the least fuel efficient out of the three engines listed. Gasoline does not hold as much energy as diesel does, which will be explained a little bit later. Most gasoline cars are normally about half as efficient as hybrids. You can see some gasoline cars get about 30 miles per gallon, but on average, many of the cars are in the 20 to 30 miles per gallon range. That is still pretty good, but nowhere near as good as a hybrid.

Diesel

Diesel engines can somewhat compete with a hybrid engine. Some of the top diesel models can eclipse the 40 miles per gallon rating. The problem is that in the United States, diesel engines do not pass all the emissions tests (some do, most don't), and this means there are less on the road. Diesel is more fuel efficient than gasoline due to its chemical composition. Diesel holds more energy per gallon, and this equates to a very large difference in fuel economy. Diesel engines are about 33 percent more fuel efficient than gasoline, so many of them can range from 30 to 40 miles per gallon. Even some of the luxury diesel SUVs get 25 miles per gallon, whereas gasoline SUVs may be under 20. 

Hybrid fuel efficiency is no match for the gasoline or diesel engine. Car manufacturers are trying to make their petrol based cars more efficient, but ultimately, it can't compete with the 45+ miles per gallon that many hybrids can offer.

In a conventional internal combustion engine, a battery is used to power accessories while the engine is turned off. As well as in combination with a starter motor, which is used for starting purposes only. An alternator powers accessories and recharges the battery while the engine is in use, and the engine itself is the focus of the vehicle's motivation. In a Hybrid Synergy Drive or HSD power train, the transmission, alternator and starter motor are replaced with a pair of powerful electric motors which generate approximately 60hp, and can work either by themselves or in unison with a conventional internal combustion engine as needed. Power distribution is controlled through a combination of mechanical power splitter, and computer controlled shunts while the motors themselves are powered by a battery pack and used for start up, low speed driving and acceleration.

Internal Combustion or Electric Power on Demand

While the internal combustion engine itself may not even be active during start up, it may be used on demand for higher road speeds, increased acceleration, or to aid in increased battery charging. When the aid of the internal combustion engine is required, one of the electric motors may be used as a starter. When the aid of the gasoline engine is no longer required, the engine itself may be turned off as needed, with load shifted in full to the electric motors. This allows a hybrid engine configuration to achieve superior fuel economy without any holes of lags in power delivery.

Regenerative Braking

In convention vehicles, braking duties are handled in full by the braking system. In the case of a vehicle equipped with hybrid synergy drive, the bulk of braking is actually handled by the same electric motors that power the vehicle. The initial travel of the brake pedal engages the motors into generator mode, which converts forward momentum into electrical current. This in turn is used to both slow the vehicle and recharge the vehicle's battery packs simultaneously. This both eliminates the need for conventional battery charging methods and greatly extends the life of traditionally equipped braking components.

Hybrid Synergy Drive equipped vehicles have managed to directly address many of the downsides found in both gasoline powered and electrically power drive trains alike, by combining their strengths into one versatile package. It is through this unique versatility in operation that hybrid technologies have become so successful compared to their fully electrically powered counterparts. Also, it's one of the main reasons why this technology may become a staple in the future of automotive technology.

Related Questions and Answers

What are the Best Sources for Information about Hybrid Vehicles?

Information about hybrid vehicles can be obtained from several different sources. Vehicle manufacturers will have a considerable amount of information on the vehicles they make. Additionally, side by side comparisons can be made between standard vehicles and hybrids, or between hybrid models. www.fueleconomy.gov is another good source for information. There are also some sites that are specialized in green technology, and more specifically, alternative fuel and hybrid vehicles. One of these sites is GREENhybrid.com, and the other is AE Hybrid Cars.

Does it Really Cost More to Build a Hybrid Car than Normal Gasoline Vehicles?

It costs more to build a hybrid car than it does to build a standard vehicle. Hybrid vehicles contain multiple electric motors, a battery pack, and the supportive electronics to use this extra equipment. The battery pack is specialized and typically around 288 volts, which is significantly more than a standard 12-volt battery. The electric motors are large and expensive. After all, they have enough power to propel the vehicle up to 25 miles per hour without the use of the fuel-burning engine. What is more, the computer and electronics are responsible for charging the battery pack and determining when to use the electric motor or fuel-burning engine.

Do Hybrid Cars Really Put Out Less Pollution?

Hybrid cars' pollution is considerably less than that of their standard fuel burning engine counterparts. A fuel burning engine is used exclusively to propel the vehicle, in standard type automobiles. However, hybrid vehicles use both a fuel burning engine and electric motors. At low speeds, and stop and go driving, the hybrid uses the electric motor exclusively to move the vehicle. Indeed, the fuel burning engine will not even be started until the vehicle sustains speeds of 25 miles per hour or more. Because a portion of the work is performed by electric motors, the hybrid vehicle's emissions are lower.

How Much is a Hybrid Car on Average?

You are probably wondering: 'how much is a hybrid car?' on average. With so many vehicle manufacturers producing hybrid vehicles, the costs are very close to being comparable to standard vehicles. Side-by-side comparisons show hybrids to be less polluting and about twice as efficient on fuel. Although they typically cost from $4,000 to $20,000 more than standard cars, a hybrid can pay for the cost difference in fuel savings over the life of the car loan. Indeed, just consider how much fuel savings there would be over the life of the vehicle. Expect to pay approximately $30,000 for an average mid-sized vehicle.

Is the Market for Hybrid Cars Growing?

The market for hybrid cars is growing mostly due to the high cost of fuel. In addition to the costs of fuel, environmental concerns have also played a major role in the proliferation of hybrid vehicles. Even though we are in depressed economic times, more people are willing to pay the little extra to purchase a hybrid vehicle, because they will be saving money on fuel in the end. Indeed, hybrid vehicles also use less mechanical parts in their construction, making them more reliable and cost effective to operate.

What Is a Regenerative Braking System?

At its core, regenerative braking uses a mechanism that allows the vehicle to slow down while converting the resulting kinetic energy that propels the vehicle forward and would normally be wasted, into a useful form of energy instead of it merely turning into heat and wafting away. This converted energy is then stored in a battery and reused in other systems within the vehicle. In this manner the vehicle’s battery is constantly being re-charged, thus allowing the driver to not have to worry about plugging a hybrid vehicle in to an outlet as often.

How Does It Work?

Still, this can be a confusing process that isn’t always easy to understand. The heat created by the friction of the tires slowing on the ground, which is still wasted, but the energy normally lost between the brake pads and rotors is what is saved. When the car slows this energy is transferred to the vehicles electric motor, in a reverse, forcing the motor to run backwards. When this electric motor is run in a backwards direction it actually serves as a generator, charging the car’s battery. In order to allow this system to work, hybrid and electric, cars also have a friction type of braking system to act as a fail safe, just in case the regenerative braking system doesn’t create enough energy to physically stop the vehicle.

An Energy Recovery System

This type of system is often referred too as an energy recovery system. This allows vehicles driven by hybrid, or pure electric, motors to reuse this stored energy to power the vehicle. Gas consumption is drastically reduced in this manner on hybrid engines, allowing for far superior gas mileage than one would expect in a pure gasoline engine. This type of energy recovery system was originally designed in the late 60’s and used on the AMC Amitron, a complete battery driven vehicle concept car.

Limitations of the Regenerative Braking System

Regenerative braking does have its limitations. Typically the system that allows this transfer of power is only available on the wheels that drive the vehicle, thus front wheels on a two wheel drive, front wheel driven vehicle. This means your vehicle is only generating power on these wheels. In addition, wear and tear is more substantial on these wheels and brake pads may wear down faster than on other wheels. Furthermore, friction is reduced at lower speeds, meaning that the regenerative breaking is greatly reduced at low speeds.

When it comes to the best hybrid vehicles on the market, there are many models competing for the top slot.

Toyota Prius
The ultimate hybrid vehicle out there, the Prius is tops on many charts. However, the recent Toyota recall and safety news may bump it down a few slots. If you look at the hybrid technology involved though, it is one of the best. It gets the best mileage of any model. with its 1.8 liter and 134 hp engine it gets 51 miles per gallon on the highway and 48 miles per gallon in the city. The Prius also offers integrated regenerative braking that helps you to save on your battery. The Prius is fairly inexpensive and prices out around $23,000.

Ford Fusion Hybrid
The Ford Fusion was ranked as the North American Car of the Year, as well as Green Car of the Year by various outlets. The Fusion is new to the list, and rose quickly. It is a sedan model that prices out around $27,000. The fuel efficiency is not as great as the Prius, but it gets 41 miles per gallon on the highway, and 36 miles per gallon in the city. It drives like a gasoline engine, which adds to its value. If you did a test of the gas and hybrid models, you probably wouldn't be able to tell the difference, whereas many other models with both engines can easily be told apart. It also features regenerative brakes, recapturing up to 94 percent of the braking energy and giving it back to the battery. With the Fusion you're offered your choice of a 2.5 liter, 175 hp engine, a 3.0 liter V-6, 240 hp engine or a 3.5 liter V-6, 263 hp engine.

Honda Civic Hybrid
The other recognizable hybrid other than the Prius is the Honda Civic. Since 2003, it has been one of the top hybrids on the market. The Civic is number two on the fuel economy list. It can get 45 miles per gallon on the highway and 40 miles per gallon in the city. It has an average price around $23,000. It is a small car, with not a lot of power. However, it makes up for that in design and technology of the car. It has a luxurious interior, with many upgrades such as satellite radio, heated seats and navigation systems. This car combines 1.3 liter engine with a 20 hp electric motor to give you an average of 110 hp. With its feature known as Idle Stop, it automatically shuts down the gasoline engine when you stop to help keep the environment cleaner and also save gas.

Honda Insight
This four-door offers fuel economy that is comparable to the Toyota Prius, with its 40 mpg city and 43 mpg highway gas mileage. It features a unique design that will come to define the electric hybrid vehicle. This hybrid features a 1.3 L, 4 cylinder gas engine that produces 88 hp. The electric motor adds an additional 13 hp and enough energy to allow the Insight to reach speeds up to 30 mph before the gas engine has to start working. The Insight also offers regenerative braking, allowing the battery to be recharged every time the brakes are used. Another plus is that the crankshaft on the gas engine spins continuously so that there is no hesitation when the gas engine kicks in.

Nissan Altima Hybrid
The Altima offers a different experience for a hybrid car. It has incredible handling, and keeps that sport car feel in both performance and design. It can get 35 miles per gallon on the highway and 33 miles per gallon in the city. It is priced higher than most hybrids at $28,000. It comes with a 2.5 4-cylinder engine, but in total with the electric motor gets 200 horsepower. Most hybrids are barely in the low 100's, so this is a big upgrade. You won't see a great loss of power with the Nissan Altima hybrid.

Mercury Milan
The Mercury Milan hybrid not only offers excellent fuel economy with its 41 mpg city and 36 mpg highway mileage, but it also offers engaging handling, and an interior that is roomy and comfortable to ride in. The Milan utilizes a 2.5L 4 cylinder gasoline engine that offers 156 hp. With the electric motor, it features a power output of up to 191 hp. It also features a swift 0 to 60 acceleration time of 8.7 seconds.

Related Questions and Answers

Can You Plug In Hybrid Cars at Home?

Plug in hybrid cars are tomorrow's science here with us today. Yes, you can plug your hybrid in at home, and this effectively makes it cheaper on gas, reducing the consumption as you utilize the electric power to run the vehicle. This basically is the whole point of the hybrid. To make it more fuel efficient and cleaner to run. Every time you plug in hybrid cars, you are saving the environment from more damage from the emissions. Some of the plug in hybrid cars utilize 120 volts, but the newer electric cars will be using 240 volt. It's safe to say the day of the plug in hybrid car is here to stay.

Does a Diesel Hybrid Car Get Better Mileage Than a Gas Powered One?

A diesel hybrid car in the form of several Volvo models will be available in the USA in 2011. That being said, they also claim they are more fuel efficient than their gas counterparts. While the most economic of the gas hybrids presently on the market in the USA claims a consumption of 51 mpg, the new Volvo diesel hybrid car claims 53 mpg. It's a small savings, but a saving nevertheless. As time goes by, each and every modification aimed at fuel efficiency and emission reduction is of significance to the overall economic saving in terms of environment. Once one diesel hybrid car makes its appearance and proves itself, more diesel hybrid cars will follow.

What are the Best Hybrid Vehicle Models for Snowy Areas?

The best hybrid vehicle for a snowy area is the Prius. This vehicle seems to top all the other Hybrids in every condition. Various reports seem to think this vehicle can cope with anything. It appears that tire tread and low body should have been a problem, but the way in which one drives the vehicle makes all the difference. It makes sense to use snow tires in snow. One suggestion however, indicated a change of tires might enable it to cope with the snowy conditions, while others have continued to use the original tires. The Prius seems to get top marks all around as the best hybrid vehicle under all conditions.

Are There Certain Hybrid Car Models that Provide a Better Tax Break?

The Hybrid car tax break started in 2006 and is dependent of when the vehicle was purchased. Certain models do enjoy a bigger tax break than others notably. For example, Ford is still offering a credit. There is a government tax incentive which can be applicable to certain models, and it can range between $2,500 to $7,500. The deciding factor on the amount of the credit will be the size of the battery. Hybrid car tax breaks apply to vehicles with 4 wheels, but there is also a tax credit available for 2 or 3 wheelers. Your tax advisor should be able to inform you of how much you can claim on your new vehicle, provided you supply them with the battery size, make of vehicle, and the date purchased to ensure you qualify for your Hybrid car tax break.

How Much Lower are Hybrid Car Emissions than Gas Powered Cars?

Hybrid car emissions can vary quite dramatically depending on who has their foot on the pedal. However that being said, one can safely say that hybrid car emissions are a minimum of 25% less than that of a gas vehicle of similar size. One cannot put a definite figure on the emission saving but with the smallest savings being at least 25%, we can only go up. Some cars and drivers have reported a savings of up to 90%. This is a tremendous savings to the environment, so it looks like finally an alternative to gas is here, and we will continue to save with hybrid car emissions.

How Does the Hybrid SUV MPG Compare to Gas Powered Economy Cars?

The Hybrid SUV mpg shows this hybrid is with us for the long term. When comparing the Hybrid SUV's mpg ratio to that of the nearest competing gas car, it becomes obvious to anyone that this vehicle is here to stay. The nearest gas powered economy car was way down on the list given out for the 2010 cars, with more power for less money. The little smart car was the only one seen on the list, and then it was down at number 8, having logged between 33 and 41 mpg. The mighty Toyota Prius Hybrid comes off in the top spot, with a return of 51 mpg. Once again, the new Hybrids show their power with the Hybrid SUV mpg savings.