HybridCarExpress.com

Consumers may soon have greater urgency to buy a hybrid gas-electric vehicle, and not just because of $3 per gallon gas.
The federal tax break on hybrid models changes from a deduction to a tax credit Jan. 1. Though the amounts of the credits haven’t been determined, many consumers will stand to benefit from the new rules.

For hybrids purchased by Dec. 31, taxpayers can take a $2,000 deduction. Eligible vehicles are the Toyota Prius, Honda Insight, Lexus RX400h and hybrid versions of the Ford Escape, Honda Accord and Civic and Toyota Highlander.

The value of the deduction depends on which tax bracket a person is. For someone in the 33 percent bracket, it is $660. Taxpayers can claim the one-time deduction whether they itemize or take the standard deduction.

Starting Jan. 1, the break on hybrids becomes a tax credit, with the entire amount deducted from the amount a taxpayer owes. That amount, however, will vary depending on the fuel efficiency and weight of eligible models.

The Internal Revenue Service has yet to issue regulations on the tax credits, but the American Council for an Energy Efficient Economy (ACEEE) estimates they will range from $3,150 on the Prius to $650 on the Accord.

The Washington-based group culled the numbers from the energy bill passed and signed in August and data available on current hybrids and those expected to go on sale soon.

The final word will come from the IRS, but it won’t publish regulations on the credit until the end of this year.

The ACEEE estimates that under the new rules, the Escape Hybrid will qualify for a $2,600 credit with two-wheel-drive and $1,950 with four-wheel-drive. The Civic will get $2,100, the RX400h $2,200 and the Highlander $2,600 with 2WD and $2,200 with 4WD.

Automakers have their own estimates.

Spokeswoman Martha Voss said Toyota expects the Prius will qualify for around $3,000 but added, “we’re hesitant to put a number on it because it depends on how the EPA calculates (mileage) and the IRS writes the regulations.”

Honda spokesman Yuzuru Matsuno estimated that the Civic will fall between $2,000 and $2,500 and Accord $1,000 to $1,500.

If you are planning to buy a hybrid next year, buy early. Once a manufacturer sells a total of 60,000 hybrids, consumers will continue to receive the full credit in the next calendar-year quarter. But for the six months after that, the credit drops to 50 percent and then to 25 percent for the next six months. After that, it disappears.

However, Voss said, as Toyota’s tax credit gets phased out, “Toyota customers will still get a substantial benefit. Even at half the credit, $1,500 on a Prius is still a pretty good deal.”

The manual version of the hybrid Honda Insight tops the latest government auto fuel economy list, with 60 miles per gallon in the city and 66 mpg on the highway.

The competitor hybrid Toyota Prius was second with 60 mpg in the city and 51 on the highway, the Environmental Protection Agency and the Department of Energy said Wednesday.

Ford Motor Co., with its hybrid SUVs, was the only American carmaker to crack the top-10 list for 2006 vehicles.

Honda, Toyota and Volkswagen make seven of the top 10 cars, mostly hybrid electric-gas or diesel-powered. Ford Escape hybrid SUVs, two-wheel and four-wheel drive, also round out the list.

The only gas-only vehicle to make the top 10 is the manual Toyota Corolla.

By classes of vehicles, the most fuel efficient SUV is the Ford Escape, with 36 mpg in the city and 31 on the highway. The most fuel efficient pickup is the Ford Ranger, 24 mpg in the city and 29 on the highway.

Among station wagons, the manual Pontiac Vibe and Toyota Corolla Matrix are tops, each with 30 mpg in the city and 36 on the highway. The most fuel efficient minivan is the Honda Odyssey, 20 mpg in the city and 28 on the highway.

Cargo and passenger vans are led by Chevrolet and GMC, each with 15 mpg in the city and 20 on the highway.

The automatic version of the Dodge Ram pickup, which gets 9 mpg in the city and 12 mpg on the highway, was the least fuel efficient vehicle in this year’s survey. Luxury cars, including models from Bentley and Ferrari, completed the list of the 10 least fuel-efficient vehicles.

The Dodge Durango, which gets 12 mpg in the city and 15 mpg on the highway, had the worst fuel economy among SUVs.

The government compiles the annual list based on information from manufacturers. The fuel economy estimates are determined by averaging numbers from a specific set of tests.

The list excludes some of the largest vehicles, such as the Hummer H2 and the Ford Excursion, because the law exempts vehicles that weigh more than 8,500 pounds from fuel economy standards.

EPA Administrator Steve Johnson said the list is designed to help consumers choose more wisely. “This year’s fleet offers a wider variety of cleaner, more fuel-efficient vehicles for car buyers to select from,'’ he said.

Energy Secretary Samuel Bodman said the Bush administration is working to get more fuel-efficient vehicles on the road through consumer education and with tax credits for hybrids.

Environmentalists said the government’s list shows the administration and carmakers aren’t doing enough to help consumers deal with high gasoline prices.

“The biggest single step to saving money at the gas pump, curbing global warming, and cutting America’s oil dependence is to make our cars, SUVs and other trucks go farther on a gallon of gas,'’ said Dan Becker, director of the Sierra Club’s global warming program.

“Automakers shouldn’t try to fool consumers by pretending their vehicles get good fuel economy,'’ he said. “They should put gas-saving technology into their cars so that they actually get good fuel economy.'’

I’ve never had a tank measure less than 46mpg!

Instead of offering a hybrid version of current Camry, Toyota has pulled forward the launch of the next -generation Camry. With a debut expected for the Detroit show next January, it can get a V-6 hybrid model to market as soon as possible to compete with Honda’s Accourd Hybrid.
The new Camry hybrid will also be the first Toyota hybrid vehicle that built outside Japan. It will be built alongside regular Camrys at Toyota’s Georgetown, Kentucky, plant.

Honda is reportedly working on a hybrid-powered Ridgeline for the 2009 model year.

Prius hybrid, gets redesigned front and rear lamps, new colors, and more luxury options such as a leather interior and a rearview camera.
Highlander hybrid, adds an engine powered by a 208-hp six-cylinder and an electric motor.