What is the tax credit?
(Don't these cars bring $500-$000 *over* MSRP? A tax credit could
cushion the blow.)
Only if you're willing to pay a dealer the "Availability Surcharge" or
"Market Adjustment Surcharge" or "we're a greedy dealership Surcharge"
of over MSRP for a hybrid available today. Most people ignore these
overpriced dealerships and go to where the Prius (or other hybrid) is
sold at MSRP. There are even a few dealerships that are selling for
less than MSRP. The only thing is that you may have to wait for your
As part of the big Energy Bill of 2005, Alternative Fuel and Hybrid
vehicles were given a tax credit. The amount of the credit depends on
a couple of formulas based on the fuel efficiency of the vehicle, the
number of vehicles sold in the US since Jan. 1, 2006, and another
criteria I forget at the moment, but the max credit possible is $500.
The Prius has qualified for the highest amount so far, at $150.
However, there is a sunset provision for the tax credits. After the
manufacturer (in this case Toyota/Lexus/Scion) has produced 60,000
hybrids, the credit amount will reduce to 50% of the full credit the
quarter after this milestone is reached. So, the full credit for
Toyota/Lexus/Scion hybrids will be dropping by 50% on Oct. 1. 2006, as
the magical number was hit during 2006Q2. Then each 2 calendar
quarters after that, it drops another 25% of full credit, until it is
gone 1 year later.
More information can be found at:
and more specifically:
I paid MSRP. I don't know anyone who paid more.
"A fool and his money are soon parted." - Author unknown to me
Drive and price a Corolla THEN decide if you want to spend all of that money
on a Prius. The money you save will buy ALL of your fuel for the Corolla
for six years. You might even drive and price a 4cy Camry, if you can put
up with its lack of power, and still save enough to buy all of its gas for
three years. ;)
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