Hybrid Cars Drive Big Savings

Fuel savings and tax breaks add up, concludes Motley Fool web site

Published: 23-Jan-2004

If you are fond of this big blue marble we call Earth and you like to save money, consider looking into hybrid cars next time you need a new set of wheels.

Today's hybrid cars run on both electricity and gasoline and offer compelling mileage -- in the range of 50 to 60 miles per gallon. Considering that most other cars are often lucky to get 25 to 30 miles per gallon, you can expect to pay half as much (or less!) on gas with hybrids as you do with your current vehicle. As a rough example, if you pay $1.60 per gallon for gas and you drive 10,000 miles per year, you'd spend around $300 on gas annually with a hybrid vs. around $500 to $600 for a Camry, Corolla, or Accord -- and nearly $1,000 for many SUVs.

If that's not enough savings for you, there are also tax breaks for hybrid buyers, though not for those who buy used hybrids. If you bought a hybrid in 2003, you may be able to take a $2,000 above-the-line deduction, which means you don't have to itemize deductions in order to take this one. If you buy one in 2004, the deduction is $1,500, and it's scheduled to decrease to $500 by 2006. (Remember that it's always possible that some politicians may increase the deduction in the future.) If you're in the 28% tax bracket, the $2,000 deduction translates to a savings of $560, while the $1,500 deduction nets you $420.

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