Toyota Prius tax credit will be history soon

Last chance!
Buy a new Toyota Prius before October 1, 2007 to receive 25% of the original federal tax credit of $3,150 offered in 2006. There will no more credits available after October 1, 2007. The amount of the credit for a particular hybrid vehicle keeps going down as the number of vehicles sold goes up. The tax credits were designed as an incentive to offset the additional cost of a hybrid versus a gasoline model.

The federal tax credits are not available on leases or used hybrid vehicles. You must buy a brand new hybrid vehicle to qualify for the tax credit. One of the biggest advantages of a tax credit is that it reduces the total tax you owe directly by the amount of the credit. For example, if you owe $5,000 in taxes, then a $1,000 tax credit reduces your tax bill to $4,000.

So, if you’ve been thinking about buying a Prius, remember that the tax credit is over after October 1, 2007. To offset reduced federal tax credits, Toyota is also offering additional savings of between $600 and $2000.

Keep in mind, there are rumors that Toyota might be introducing a new generation of Prius as a 2009 model in late 2008. If you would rather wait for the latest in hybrid innovation from Toyota, then no worries!