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Hybrid Vehicle Ownership Costs

By Insurance.com Posted : 03/10/2006

Thinking about purchasing a hybrid to save on gas? What if we told you that owning a hybrid could also decrease your auto insurance rate?

That's right, starting February 2006; at least one of Insurance.com's auto insurance partners will be offering hybrid car owners a 10% discount on auto insurance rates. According to preliminary research, hybrid owners tend to fall into a preferred insured category, associating hybrid owners as low risk drivers and therefore warranting lower premiums. Hybrid vehicle sales have at least doubled every year since the first car was offered in 1999. This trend shows no signs of slowing. Auto insurance providers are starting to reach out to serve this growing market group with innovative products to meet the changing needs of their customers.

In the past, hybrid ownership was confined to those attracted to new technologies and the environmentally conscious. However, with the aftermath of hurricane Katrina, where gas prices rose as high as three dollars a gallon, the number of hybrids on the roads has increased. Currently there are over 328,000 registered hybrid vehicles on the road, mostly residing in California, Virginia, Washington, Florida, Los Angeles, San Francisco, Washington, D.C. and New York. And who exactly is driving these money saving automobiles? The hybrid owner profile is married men and women ranging from the age of 41 to 60.

Hybrid tax breaks
In addition to saving money on gas and auto insurance rates, new owners will also benefit from a new federal tax break established for 2006. These tax breaks will come in the form of tax credits, ranging from $3,150 for buyers of the Toyota Prius to $250 for Chevrolet's Silverado pickup truck, according the American Council for an Energy-Efficient Economy (ACEEE.)

To help you compare the savings of each hybrid model, the ACEEE has developed a chart displaying the make, model and estimated tax credit per car.

Current Models
Make Model Estimated Tax Credit
Ford Escape Hybrid (2wd) $2,600
Ford Escape Hybrid (4wd) $1,950
Honda Accord Hybrid $650
Honda Civic Hybrid (auto) $2,100
Honda Civic Hybrid (manual) $1.700
Honda Insight (auto) $2,600
Lexus RX400h $2,200
Mercury Mariner Hybrid $1,950
Toyota Highlander Hybrid (2wd) $2,600
Toyota Highlander Hybrid (4wd) $2,200
Toyota Prius $3,150

 

Upcoming Models (based on estimated specs)
Make Model Estimated Tax Credit
Chevrolet/GMC Silverado/Sierra $250
Lexus GS450h $1,300
Nissan Altima $1,300
Toyota Camry $1,300

*These tax credits are estimated. The exact hybrid tax credit amounts will be determined by the I.R.S.

This tax break won't last forever. The new tax credit sets a limit of 60,000 hybrids per carmaker. After the manufacturer has hit this mark (based on the quantity of hybrid vehicles manufactured and delivered to dealerships, rather than hybrids actually sold), the credit will begin to phase out over a 15-month period, reducing the chance for those who buy late in the year to receive the same breaks as their fellow hybrid owners received in early '06.

And as always, there are some basic rules that must be met in order to qualify for this money saving tax credit:

  • Purchase and take delivery of a qualifying vehicle on or after Jan. 1, 2006.
  • Purchase the vehicle new, not used.
  • Purchase the vehicle with the intention of using it, not re-selling it.

So do all these incentives and discounts really make a difference to prospective car shoppers? You bet! Hybrid dealerships are happily reporting long waiting lists and fast sales. According to one Honda salesman in Gardena, California, "If the car is available, they get it as soon as possible." Sounds like you have to be lucky to get your hands on one of these money saving machines! If you do, Insurance.com's auto quote comparison tool can help you leverage new hybrid discounts as they become available by comparing auto insurance rates from top insurance companies.

 

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