States Encourage Drivers to Buy Hybrid Vehicles

More than a dozen states and several cities are encouraging drivers to buy fuel-efficient hybrid cars by offering tax breaks, free parking and the use of HOV lanes reserved for car poolers.

Published: 26-May-2005

 SAN DIEGO -- More than a dozen states and several cities are encouraging drivers to buy fuel-efficient hybrid cars by offering tax breaks, free parking and the use of HOV lanes reserved for car poolers.

The motive is to help clean the air by cutting down on fuel emissions. Hybrids, such as the popular Toyota Prius and versions of the Ford Escape and Honda Accord, not only run cleaner but also go farther on a tank of gasoline by using a gas engine with an electric motor.

"We want people to buy hybrids," says Diana Enright, spokeswoman for the Oregon Department of Energy. "In Oregon, the single largest contributor to air pollution is vehicle emissions."

At least 15 states and three cities have incentives in place. Thirteen states are considering such measures.

Oregon offers individuals a state tax credit of as much as $1,500 for buying a hybrid. In Connecticut, cars that get at least 40 mpg are exempt from the 6% sales tax. Colorado hybrid buyers can qualify for a state tax credit of up to $4,713.

The federal government allows a one-time tax deduction for buying a hybrid — $2,000 this year and $500 in 2006.

Drivers in Los Angeles, Albuquerque and San Jose, Calif., can park free at city meters with their hybrids, although they must still adhere to time limits.

"We think it's working," says Sahar Moridani, spokeswoman for Los Angeles Mayor Jim Hahn. About 1,500 hybrids a week use the city's metered spaces for free, she says. "We think as more and more people learn about this, more people will buy hybrids — cars that use less gas and cause less pollution. And that's what we want."

In Virginia and Utah, drivers of hybrids can be the sole person in the vehicle and still use the high-occupancy-vehicle (HOV) lanes usually reserved for buses and cars with two or more people.

In fact, the program has been so popular in the Virginia suburbs of Washington, D.C., that the HOV lanes are clogged with traffic because of more hybrids.

Hybrids make up less than 1% of the new car market. But registrations nationwide rose 81% to 83,153 last year, according to the research firm R.L. Polk & Co. High gas prices and more hybrid models on the market are the main reasons for the increase, says Mark Pauze, an analyst for Polk. Nevertheless, tax deductions and credits "certainly help," he says.

Hybrids get better mileage than regular engines, but the savings in gas isn't enough to offset the extra $2,000 to $6,000 to buy a hybrid, says David Friedman of the Union of Concerned Scientists. "The tax credits are the biggest and most important" incentive that attracts consumers," he says.

Sev MacPete, president of the Toyota Prius Club in San Diego, says hybrid owners don't buy one "just to save a few bucks on gas."

"Most people buy (hybrids) because they're environmentally concerned," says MacPete, who started his club in April 2004 and has about 180 members. "Others want the latest technology. For others it's patriotic. They see hybrids as a way to cut down dependence on foreign oil. And there are the people who want to drive in the HOV lanes."

Kirsten Nathanson, a lawyer in Arlington, Va., uses her Prius on HOV lanes. "I wouldn't say it's the only reason, but it's a main reason why I bought the car," she says. She bought it in December and cut her commute to 20 minutes from 40.

Virginia and Utah passed legislation that allows hybrids with one occupant to use the fast lanes. At least four other states — California, Colorado, Georgia and Florida — have passed similar laws but are waiting for a waiver from the federal government. Without the waiver, the states could lose federal highway money.

Joan Morris, spokeswoman for the Virginia Department of Transportation, says the Federal Highway Administration has noted the state's "non-compliance" several times but has decided not to take action because Congress is likely to approve some form of the waiver this year.

Meanwhile, traffic that once flowed smoothly in the HOV lanes along Interstate 95 and Interstate 395 in Virginia is slowing down. Hybrids now account for 18% of the vehicles in the lanes, Morris says. During morning rush hour, the number of hybrids in the HOV lanes heading into Washington, D.C., increased to 1,700 last fall from 480 last spring, Morris said.

In April 2003, about 2,500 hybrid drivers in Virginia had registered their cars and asked for "clean fuel" license plates. By last December, 6,800 had the specialty plates.

The Virginia law allowing hybrids in HOV lanes ends in 2006, but many, including the state's Highway Patrol, are calling for it to stop sooner, Morris says.

Hybrid driver Martin Wachs says he sees no reason to allow vehicles like his in commuter lanes. Wachs, director of the Institute of Transportation Studies at the University of California-Berkeley, says the lanes were created "to reduce the number of vehicles on the road." He supports other incentives like tax credits, reduced sales tax and free parking, which are "certainly not hurting the sales of hybrids."

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