We already covered the fantastic sales tax credit for new vehicle purchases in 2009 but don't forget about the Hybrid tax credit, too! The Energy Policy Act of 2005 provides a credit for taxpayers who purchase certain energy efficient vehicles, including Qualified Hybrid vehicles. Hybrid vehicles have drive trains powered by both internal combustion engine and a rechargeable battery. There is a potential for a credit in four separate categories of vehicles: 1) Fuel Cell vehicles, 2) Advanced Lean Burn Technology vehicles, 3) Hybrid vehicles and 4) Alternative Fuel vehicles.
Let's take a look at an example of the incredible incentives to make a new purchase. The 2009 Ford Escape Hybrid 2WD has an MSRP of approximately $31,000. Sales tax in my county is about 7.25% and the credit, according the IRS website below, is $3000. The sales tax credit and the hybrid credit combine for a whopping $5248 in tax savings!!! That's about a 17% discount off MSRP in tax credits - not to mention the reduction in emissions and drastically improved gas mileage, it's almost a no-brainer to buy a new vehicle this year.
Also, keep an eye out for yet another new voucher program coming out that incents people to trade in their own gas guzzlers and upgrade to more fuel efficient vehicles. If your new car gets 10 mpg more than your old car, you could qualify for an additional $4500!!! We will keep you posted as this bill sails through the House and Senate. Check out this gas guzzler trade in article on MSN for more info.
Read more about the hybrid tax credit and compare the various amounts of credit available for your favorite makes and models: