Time Running Short on Toyota Hybrid Tax Credit
If you've ever thought about picking up a Toyota hybrid (either a Prius or Highlander, with Camry coming soon), we suggest you make haste and do it soon. According to The Energy Policy Act of 2005 (EPACT), signed into law last August and effective January 1, the tax credit buyers receive for purchasing a hybrid car begins to phase out after an automaker sells 60,000 of the eligible vehicles between the beginning of 2006 and the end of 2010. The one-year credit "phase out" begins after the next complete calendar quarter; 50% of the credit will be available for that manufacturer's hybrids in the first two quarters of the phaseout period and 25% in the final two quarters. According to the Detroit News, after selling 146,533 hybrids last year, Toyota is on track to hit the 60,000 mark in the first half of 2006; the sun is definitely setting on the automaker's ability to offer full tax credits.That means that the deductions for both Prius (currently US $3,150) and Highlander ($1,950 for front wheel drive and $2,200 for four wheel drive) will likely be cut in half starting later this year, and will continue to drop as more are sold. This could be good news for competing, slower-selling hybrid manufacturers like Honda and Ford, who are likely to maintain the full tax-credit through 2006. This gives us cause to pause and wonder: will a reduced tax credit cause consumers to go with their second choice when it comes to a hybrid car? Or are hybrid buyers willing to eat the loss of $1,000 or $1,500 in tax credits to stick with a car they want? Perhaps we'll all know in about six months. via ::Jalopnik.