Hybrid Vehicle Perks

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

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.

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.

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. 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.

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.

Fragments taken from USA Today