Hybrid car buyers beware

When it comes to the environment, George Bush is a scatological King Midas: everything he touches turns to crap. Well, in the case of the revised federal tax incentive program for hybrid cars, let’s give him some credit and call it half-crap.

On the positive side, the new energy bill changes the current tax deduction for buying a hybrid car into a more valuable tax credit. As described on Hybridcars.com, after January 1, 2006 the present $2,000 deduction is going to become a tax credit whose value depends on a complex formula involving fuel economy and lifetime expected fuel savings.

For example, the Toyota Prius that we own now is estimated to qualify for a $3,150 tax credit, while the Toyota Highlander Hybrid that we’re considering buying would come with a $2,200 credit (the Prius gets about 45 mpg in real-world driving and the Highlander about 26 mpg).

On the negative side, the new law sets a limit for the tax credit of 60,000 hybrids per carmaker. Then the credits will phase out over a 15-month period. That’s ridiculous.

The whole idea of giving people a tax credit for buying a hybrid is to encourage hybrids to be bought, isn’t it? So why phase out the credit when an auto manufacturer succeeds in selling 60,000 hybrid cars?

Two reasons come to mind: (1) the Bush administration wants to be able to say that it is encouraging hybrid technology without putting much action behind its words, and (2) the Japanese automakers, Toyota and Honda, are way ahead of the American automakers in hybrid sales.

So it is going to be Toyota and Honda hybrid buyers who will get screwed if they get a 2006 car after 60,000 others have been sold. Toyota is on track to sell about 100,000 Priuses in 2005 plus over 15,000 Highlander Hybrids, as reported here. Almost certainly sales will be up for 2006, given rising gas prices and the increasing popularity of hybrids.

Thus Hybridcars.com advises:

If you’re on a waiting list for a hybrid, and expect to see it roll into the dealership late in the year, you might want to slightly delay your purchase to take advantage of the higher tax breaks. But if you are considering a Toyota or Honda hybrid, don’t delay the purchase for too long [for the reason I’ve just mentioned].

I asked the Toyota salesman that we’ve been working with on our prospective Highlander purchase about all this. He agreed that Japanese auto hybrid buyers who get a car late in the year are going to be ticked off when they learn that their tax credit will be lower than that given to earlier buyers.

This is another example of how the Bush administration pays lip service to environmental concerns such as global warming but really doesn’t give a s___t.

Meanwhile, the Siberian permafrost is melting for the first time since it formed 11,000 years ago. Bad news, but it won’t bother Bush since he doesn’t read the news.

Comments

[stephen stearns]

I would encourage everyone to check out the Hybrid Escape from Ford. It is already the best sellng small suv. Don't count out Ford. My neighbor has one and it is great.

[Mike D]

In a time of conservative control of all three branches of government, let's just be thankful that national security and environmentalism have a common interest in reducing petroleum use.

[George G. Boukas]

Beware of hidden expenses! And really bad warranties! I love my Mariner Hybrid; until my check brake light went off! After replacing the rotors and the pads; which in my mind were routine maintenance things, the warning light was still on. The dealership informed me that the ABS Modulator Valve needed to be replaced; normally a $400.00 to $500.00 part. The unique nature of this part made the repair $4,690.00. BUYERS BEWARE; because Ford Motor Company does not warranty this part under its Unique Hybrid Extended Warranty!