How it Works: Hybrid Tax Breaks

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2006 Toyota Highlander Hybrid

Credit: $2,600
Status: Over the limit; Toyota Highlander Hybrid tax credits will be cut to $1,300 in October 2006, and $650 in April, 2007.
Pros: More powerful than you’d expect from a hybrid thanks to its V6 engine; all the good traits of a Highlander, such as room and reliability, with a Super Ultra Low Emission Vehicle (SULEV) rating.
Cons: For a hybrid, gas mileage is rated at just 30 miles per gallon combined – and your actual mileage will be less. Our tester managed a paltry 19.8 miles combined city and highway miles per gallon.

2007 Toyota Camry Hybrid

Credit: $2,600
Status: Over the limit; Toyota Camry Hybrid tax credits will be cut to $1,300 in October 2006, and $650 in April, 2007.
Pros: Camry-like ride, comfort and convenience with hybrid sensibility, excellent gas mileage with above average performance. When a hybrid performs better than a four-cylinder and still gets four-cylinder gas mileage (39 combined, we achieved 33 mpg) that’s a winner.
Cons: Sticker price is $25,900, but real world price is closer to $30,000. California drivers should also take note that the Toyota Camry Hybrid fails to qualify for single-driver HOV access.

2006 Ford Escape Hybrid 2WD

Credit: $2,600
Status: Under the limit; looks to be for some time.
Pros: The Escape offers drivers a high seat position, step-in height and cargo room. Add to that a full-hybrid powertrain that, like the Toyota models, can run solely on battery power up to around 15 miles per hour, and you have a fuel-efficient and clean-burning SUV.
Cons: Ride quality, fit and finish and cargo room (the fuel cell battery is located on the rear cargo floor) are outmatched by competitors. The sticker price is also a bit high. California drivers should also take note that the Ford Escape Hybrid fails to qualify for single-driver HOV access.