For years the Toyota Prius has been the car du jour to show-off your eco-friendly credentials. Owners received federal tax credits, and in some areas even enjoyed perks like unrestricted access to carpool lanes and free parking at meters. However most of these benefits for the Prius have now been phased out, and the IRS has crowned a new tax-credit king: if you want to cash-in on going green, skip Toyota and head to your nearest Ford dealer.
Buyers of two-wheel drive versions of either the 2008 Ford Escape or Mercury Mariner hybrids are eligible for a federal tax credit of $3,000 (4WD versions get only $2,200), and last year's models can get up to $2,600. Other hybrid models don't get nearly as much love from Uncle Sam, with Honda's Civic qualifying for $2,100, the (now-discontinued) Accord bringing $1,300, and the 2007 Saturn Vue and Chevy Silverado earning a measly $650 and $250, respectively. Saturn recently introduced a two-mode hybrid Vue Green Line for 2009, which may get a better credit.
Intended to stimulate consumer interest in hybrids and offset the premium buyers have to pay for their exotic drivetrains, the IRS tax credits come with one very large catch: they last only until an automaker's hybrid sales reach the magical 60,000 mark. Because of this all Toyota hybrids purchased after October of last year earn you a tax savings of exactly zero.
Of course since the whole idea was to encourage people to buy hybrids in the first place, punishing automakers for selling too many of them doesn't make much sense. Then again no one's ever accused the IRS of being overly logical. Ford has yet to sell 60,000 hybrid models (but don't blame Kermit) so the credit still applies, however to be sure you get the full $3,000 it'd be best not to wait too long. Hey, if you use your stimulus-package money as a down payment then file for the credit, it's almost be like getting the SUV for nothing down.
Source: IRS