>Tax Credits for Hybrids and Diesels

Many new car buyers are considering hybrid and diesel vehicles as a way to not only save the planet, but also money.  With gas prices uncertain, a fuel efficient vehicle could save you a lot of money over time.  That gas sipper could also get you a hefty tax credit, but only if you buy soon.

The federal government is offering tax credits on fuel efficient hybrids and diesels, but the credits are limited by vehicle sales.  The tax credits are cut as vehicles sell more and more, so popular vehicles like the Toyota Prius and Honda Insight are no longer available with a credit.  Slightly less popular vehicles like the Ford Escape Hybrid and Mercury Mariner Hybrid are still available with reduced credit, and those credits will expire for good at the end of March 2010.

While the popularity of hybrids and diesels has eaten up most of the tax credits, there are still some vehicles left with sizeable deductions available.  The 2010 Nissan Altima Hybrid, comes with a $2,350 credit.  The 2010 Chevrolet Tahoe Hybrid (and its twin, the GMC Yukon Hybrid) has a $2,200 tax credit.

As far as diesels go, the tax credits aren’t as high, but the vehicle prices are generally lower too.  VW and Audi are the only brands that have qualifying vehicles for 2010.  The standout of the bunch is the brand new 2010 VW Golf TDI with an automatic transmission, which is eligible for a credit of $1,700.  Stick-shift models only get a $1,300 tax credit.

All of the tax credits for 2010 new vehicles are included below, visit the IRS Web site to see which 2009 models have tax credits available.

2010 Model Year Hybrid Vehicles

2010 Advanced Lean-Burn Vehicles