Time Running Out for Toyota/Lexus Hybrid Car Buyers

Thinking of buying a Toyota Prius? Better act fast, because the tax credit for Toyota and Lexus models will be reduced starting April 1, 2007.

The hybrid tax credit for Toyota and Lexus models is being phased-out gradually. Toyota and Lexus models were eligible for the full amount of the credit until October 1, 2006. That's when the credit amount was reduced in half. Starting April 1, 2007, the credit will be reduced in half again. Taxpayers who take delivery between April 1 and September 30, 2007, will be eligible for only 25% of the original tax credit amount. The phase-out impacts the Toyota Prius, Highland, and Camry hybrids and the Lexus GS 450h and RX400h models.

Hybrid vehicles from other manufacturers are still eligible for the full tax credit. The tax credit starts being reduced once a manufacturer sells 60,000 qualifying hybrid vehicles.

More information: Hybrid Tax Credit | Limitations | Eligible Vehicles | Phase-outs

From the IRS: Phase-Out Credit for Toyota and Lexus Hybrids Continues With Reporting of Fourth Quarter Sales (IR-2007-28)

From About.com: What You Should Know About Hybrid Cars | Five Fuel-Efficient Cars