Does Your Hybrid Vehicle Qualify for Full Tax Credits?

Not all 2007 tax credits for hybrid vehicles are the same, even if the taxpayer bought the same car. How is that possible?

The 2005 Energy Act providing tax credits for new hybrid vehicle owners include qualifications that the owners must meet. Some of the qualifications such as the following are clear cut.

1. The vehicle must be bought on or before 12/31/10 and driven or used after 12/31/05.

2. The tax credit may be claimed only by the original owner of the new hybrid. A preowned or used hybrid vehicle does not qualify for the credit.

3. In order to take advantage of their credit, some first time owners of hybrid vehicles might have to recapture their tax credit if they resell their hybrid car or truck.

4, The vehicle must be driven mainly in the United States.

5. If a hybrid vehicle is leased, the leasing company has the right to claim the tax credit, as the credit is only available to the original purchaser of the hybrid vehicle.

So far the hybrid owner only needs to take basic precautions. But the Energy Act goes farther and places other qualifications to consider such as the date of purchase and number of hybrids sold per car manufacturer.

The number of hybrids is limited by 60,000 hybrids per car manufacturers that may be claimed for taxes. Two hybrids that have met the 60,000 mark in June 2006 are Toyota and Lexus hybrids. Buyers who purchased their Toyota hybrid or Lexus hybrid before October 1 will have 100 percent of their tax credit. While buyers who purchased their hybrids on or after October 1 will have a tax credit that is reduced by 50 percent.

That means that some buyers of a new Prius or Lexus hybrid vehicle will qualify for the full $3,150 tax credit. While other buyers of the same vehicle will receive only a $1,575 tax credit. Therefore, the amount that the taxpayer may claim is not only based on the amount the vehicles qualifies for but also is based on the date the hybrid was purchased.

It should be noted that the tax credit will not last forever, but will be phased out by 2010. This is hurried along by reducing the amount of tax claims until it is gone.

For example, after 60,000 vehicles are sold, the taxpayer may claim the full amount of credit for that first quarter. For the second and third quarter after 60,000 vehicles are sold, the taxpayer may claim half or 50 percent of the tax credit. During the fourth and fifth quarter, the taxpayer may claim 25 percent of tax claim. After the fifth quarter the 60,000 vehicles are sold, no tax credit may be claimed.

A further limitation in claiming a tax credit is based on the type of vehicle purchased. This involves the amount of reduced emissions and fuels saved by the said vehicle. Only the type of vehicle is considered. Price is not a factor. You would guess that the more expensive hybrids would bring a higher tax credit. But, this is not always the case. For example, a $40,000 Lexus RX 400h hybrid commands a maximum of only a $2,200 tax credit.

Another consideration in limiting tax credits is the Alternative Minimum Tax (ATM), which may disqualify some other taxpayers.

Other hybrid manufacturers such Honda, Ford, GM have not meet the 60,000 limit and still qualify for the full amount. You do not have the same considerations, at the present time, that others such as Toyota hybrid owners must contend with.

Hybrid Vehicles

Is there a market for Hybrid Vehicles in the United States? The problem is compelling. When gas prices shot up last year averaging about $3.76 a gallon, everyone was looking to save at the pumps. Car makers were selling lots of compact cars. America’s vehicles were getting smaller.

Then the opposite happened. Gas prices started to fall and Americans went back to buying Ford F150’s and powerful full size SUV’s. The car markers and dealerships had the problem of lots of compact vehicles and some Hybrid Vehicles on their lots and no buyers.

So what are the car makers to do? What about consumers? Do we have to guess at what the market will bring? Will there be another “cash for clunker program”?

Well the answer is we have to be savvy buyers. We are going to have to ask ourselves how big of a vehicle do we want? Do we buy compact, subcompact, SUV, hybrid, or even truck?

What we ultimately would like are larger vehicles that uses less fuel. Oh yes, but not at the expense of giving up on power or reliability.

Fortunately technology is addressing this issue and the answer is in Hybrid vehicles and cleaner burning diesel cars and trucks.

What is a hybrid vehicle? Well it is any vehicle that combines two or more sources of power that can directly or indirectly provide propulsion power to act in unison or independently of each other.Wow that’s a mouthful. Basically it can if it would like to, do two things at the same time.

Hybrid vehicles have very sophisticated electric motors and generators that are used to produce electrical power.The electric motor in the units use batteries which are used to draw energy to accelerate the car or truck. But acting as a generator, it can also slow the car down and return energy back to the batteries.

So it can give and take when it is asked to.

The unit has periodic engine shut off – when the car is stopped in traffic, the engine is temporarily shut off. It restarts automatically when put back into gear either by stepping on the accelerator or releasing the clutch.

Hybrid Vehicles utilize things like a sleeker body style. Thinner tires,lighter composites all to reduce the weight and drag to bring better fuel mileage and save energy.

There are really two kinds of gasoline hybrids. The parallel hybrid and the series hybrid.
In a parallel hybrid vehicle, a gasoline engine and an electric motor blend together to move the vehicle. Basically doing two things at the same time.

In a series hybrid the gasoline engine either directly powers an electric motor that powers the vehicle or charges batteries that will power the motor. Basically doing only one thing at a time.

The automobile industry as a whole has a new and vital role in implementing changes as to how it is going to continue to make vehicles. We can see sweeping changes happening each and every year as the EPA keeps forcing the industry to cut emissions. Consumers are always looking for better fuel economy and better performance. Buyers are now starting to “think green” when purchasing vehicles are and stressing for more ways to bring a lighter environmental impact on our fragile world.

The good news is that the automobile industries are developing newer technologies and addressing each and every avenue to bring consumers what the want.

As we continue to move on into the new decade we will start to see things like solar panels built into the top of cars keeping them cool as they are parked. Solar panels in the headlights and taillights will help recharge the hybrid batteries.

The future of the automobile industry as well as the economy will remain a mystery for now. However our technological advances in making superior energy efficient vehicles are mind boggling. As we keep coming up with new ideas and better ways to improve on itself. It is an exciting time to see the changes occurring and we can look forward to seeing marked improvements in all phases of fuel economy and conservation.

Keep “Thinking Green” my friends

Hybrid Vehicle Top Safety Pick

An auto insurance trade group, The Insurance Institute for Highway Safety, has named a hybrid vehicle as a top safety pick. The Chevrolet Volt, a plug-in hybrid vehicle with a small gasoline engine, achieved the honor along with the all-electric Nissan Leaf. The Insurance Institute offered the judgment after the group’s first US crash tests of plug-in and pure electric cars. Anyone wondering if hybrid vehicles are going to be safe can rest easy.

The Volt earned its top rating of “good” for front, side, rear and rollover crash protection. The Institute also noted that both the Volt and the Leaf have standard electric stability control which the group considers a crucial safety feature. Makers of hybrid vehicles are clearly using the same standards of safety in the production of these new types of cars as in the more common internal combustion engine vehicles.

Critics have long argued that hybrid vehicles could not be made economically and that safety would be compromised in the rush to “go green,” but the recent crash tests show that this is not the case. These hybrid vehicles are as safe or safer than any car produced today.

Both the Nissan Leaf and the Chevrolet Volt are small cars which initially would seem to indicate a lack of safety. Both, though, have battery packs adding significant weight to the vehicles making them safer than other cars in their class. This, too, was demonstrated by the Institute’s crash tests.

Additionally, the tests proved that using technology to boost fuel economy, such as the electric batteries in both these vehicles, is preferable to simply downsizing and lightening the weight of cars to save fuel. Hybrid vehicles are actually safer than standard cars of the same size while remarkably fuel-efficient at the same time.

These hybrid vehicles are perfect for highway driving. Should a crash occur, these cars will protect the drivers better than the vast majority of standard cars.

In fact, these electric cars are far safer than the low-speed vehicles, such as the GEM e2 or the Wheego Whip, which were judged dangerous after crash tests last year. These are golf-cart-like vehicles which are becoming increasingly popular, but are not required to meet the national safety standards of passenger vehicles.

The image of the electric and hybrid car was damaged in the mind of the consumer by these small carts which were never meant for highway driving. Nevertheless, industry observers think that the new tests will propel the Leaf and the Volt forward in the minds of eco-minded consumers who have been waiting for a chance to purchase a reasonably green, fuel-efficient and safe car for at least five years. The time has finally arrived. Both the Leaf and the Volt are extremely safe, fuel-efficient and will not harm the environment. Auto makers have finally turned the corner on producing desirable hybrid vehicles.