With the new stimulus package offering consumers the ability to deduct state and local taxes on new car purchases, and a variety of tax credits available on hybrid and alternative-fuel cars, there’s never been a better time for consumers to take advantage of tax benefits on new car purchases.  

Over at Cars.com, they’ve made sorting it all out a lot easier.

According to a recent Cars.com survey, 58 percent of consumers who considered buying a new car in the past six months said they would be influenced to buy a new car because of the tax deductions outlined in the stimulus plan. The stimulus package allows any family making less than $250,000 or any individual making less than $125,000 to deduct the local sales and state taxes they paid on any new vehicle purchased after Feb. 17, 2009. The deduction is limited to new cars, light trucks, recreational vehicles and motorcycles that cost less than $49,500.

For consumers looking to buy a hybrid vehicle this year, or for those who purchased a new hybrid in 2008, there are still plenty of tax credits to take advantage of. In accordance with the Energy Policy Act of 2005, certain cars purchased beginning in 2006 can earn credits of up to $4,000. To be eligible for these credits, vehicles have to fall into one of four categories:

• Fuel Cell
• Advance Lean-Burn Technology
• Hybrid
• Alternative Fuel

For some cars, the credit you can claim depends on the exact date you bought the car. That’s because the Energy Policy Act of 2005 says that when a manufacturer reaches 60,000 sales of eligible vehicles - as reported to the government each quarter - the credits will begin to be phased out. Full tax credits are still available for qualifying vehicles from several automakers, but other manufacturers’ credits have been either reduced or completely phased out.

Below are tax credits for a few hybrid and alternative-fuel cars.  For the complete list, please visit  Cars.com.  

BMW
• 2009 335d: $900
• 2009 X5 xDrive35d: $1,800

Cadillac
• 2009 Escalade Hybrid: $2,200 (2WD) or $1,800 (4WD)

Chevrolet
• 2009 Malibu Hybrid: $1,550
• 2009 Tahoe Hybrid 2WD and 4WD: $2,200
• 2008 Malibu Hybrid: $1,300
• 2008 Tahoe Hybrid 2WD and 4WD: $2,200
• 2007 Silverado Hybrid: $250 (2WD) or $650 (4WD)

Chrysler
• 2009 Aspen Hybrid: $2,200

Dodge
• 2009 Durango Hybrid: $2,200

Ford
• 2009 Escape Hybrid: $3,000 (2WD) or $1,950 (4WD)
• 2008 Escape Hybrid: $3,000 (2WD) or $2,200 (4WD)
• 2007 Escape Hybrid: $2,600 (2WD) or $1,950 (4WD)

Tags: Advice, Car Shopping, General // Add Comment »