We're looking into getting either a 2006-2008 Highlander or an Escape and were wondering if were eligible for the federal tax benefit. Is that benefit strictly for new cars or could second and third owners get a smaller piece of the action.

 

Sorry - No. Go to the instructions for the 8910 Tax form and it clearly says "New".

 

New to me

Too much push to buy new, like with the Cash for Clunkers rebates. It would depreciate the $4500 in the first month. I later purchased a used 2008 9000 mile car for about 30% or $7500 less than new.

 

I found that Colorado's (maybe other states, as well) tax credit is a one time use law (as opposed to the federal law allowing the credit only for a new car). If the hybrid hasn't been registered with the state, you can get the tax credit. Colorado wants proof that the vehicle wasn't registered before and you get a percentage determined by the difference between the msrp for a non-hybrid and the price you paid. If the msrp for a new non-hybrid Escape was say, $30000, and you bought yours for $24K....You get 80% of the credit.

 

According to the basic rules of the federal tax incentives on hybrid cars “The original use of the vehicle must begin with the taxpayer claiming the credit. The credit may only be claimed by the original owner of a new, qualifying, hybrid vehicle and does not apply to a used hybrid vehicle” which means that the original owner of the hybrid car that you bought has already claimed the incentives.

 

The money you will save getting a good used hybrid will be much, much more than any available tax incentive.