Wednesday, April 05, 2006
There's still time for tax savings!
The new tax credit, which offers up to $3,400 for taxpayers who buy an eligible car, phases out once a manufacturer sells more than 60,000 hybrids. It seems that even the most popular manufacturer, Toyota, isn't expected to hit that mark for at least a few months.Many industry watchers expect Toyota will surpass the 60,000 limit before the end of the year. Toyota sold just under 108,000 of its Prius alone in 2005, and a total of 146,512 hybrid vehicles, counting the carmaker's Lexus RX400 and the Highlander, according to WardsAuto.com.
There also seems to be a tax "grace period"
The IRS counts the "60,000 in sales" from Jan. 1, 2006. Once a manufacturer sells that many hybrids, there's effectively a grace period, and then the credit starts to phase out.
Something to consider though....is the amount of the credit varies enormously depending on the model.
The IRS will judge each model on a variety of fuel-efficiency criteria, and then allot a certain amount per model. While the IRS has not yet published specific dollar amounts for each model, the ACEEE has published preliminary estimates based on the details of the law enacting the tax credit.For instance, the credit for the Toyota Prius is $3,150, while the Honda Insight is up for a $1,450 credit, according to those preliminary estimates. See the ACEEE estimates on each model.
ALSO...Prices may come down after the credit expires, suggests Mike Chung, industry analyst with Edmunds.com
Read more via Marketwatch.com