Tax Breaks for Fuel-Efficient Cars

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People who purchase a Fuel-Efficient car in 2006 may end up with a little cash back. Tax breaks that could equal more than $3000.00 were introduced.

The “Tax Break” amounts to a tax deduction in the amount of the break. An family that is in the 35% tax bracket could see upwards of $700 in actual reduced taxes. I think this is a great way to influence the market to purchase more fuel-efficient and earth friendly automobiles. On the downside there are some who would argue that the money you save in taxes would easily be eaten by extra maintenance costs on the more technical hybrid cars.

The autos that qualify for the tax break are selected by their improvement in fuel efficiency from the previous year.

CBS News reports:

A few months after a car maker has sold 60,000 hybrid vehicles, the tax credit begins phasing out, reducing the chance buyers late in the year will get the same break as those who buy in January or February.

So if your in the market for a new car, now might be the time to do so. Especially if you are looking into a hybrid.

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