Ever since gas prices exploded and topped well over $4 per gallon, drivers have been looking for less expensive transportation options to spare their wallets at the pump. Gas isn’t quite as high anymore, but the popularity of fuel-saving alternatives like hybrid vehicles has only grown over time.
If you’ve been toying with the idea of getting an electric or hybrid car, but aren’t sure the gas savings are really enough to offset the expense of buying a brand new vehicle, check out the additional ways in which green cars help save more money (like on your next auto loan).
Discounts on Hybrid Loan Rates
To be honest, auto loans for hybrid vehicles are probably more expensive than for regular cars, only because the vehicles themselves are a little pricier–average hybrid car prices run between $23,000 and $35,000 MSRPÂ for sedans. The more you have to borrow, the bigger your monthly payments will be.
However, dealers and lenders often offer rate discounts to borrowers who wish to finance a hybrid. If you can find a bank, credit union or dealership near you that’s offering a special “green” deal, it might make the big purchase worth it. Here are a couple hybrid car discounts that currently exist:
Addison Avenue Federal Credit Union: Green Auto Loan. This credit union recently changed their “hybrid auto loan” to the “green auto loan” to give car buyers a break on financing for fuel saving vehicles that aren’t technically hybrids. In addition to hybrids and alternative fuel vehicles, the 1.25% discount applies to standard gas and diesel powered vehicles with an EPA highway fuel economy rating of 40 miles per gallon better.
Stanford Federal Credit Union: Drive Green Auto Loan. You can save some green when you finance an environmentally friendly vehicle through Stanford FCU. They offer the Drive Green Auto Loan to reward “members who help support the preservation of our environment by driving hybrid or alternative fuel vehicles.” You can receive a 0.25% APR discount off new or used standard auto loan rates when you buy a hybrid car.
Hybrid Insurance Discounts
Once you’ve purchased a car, the next big expense on the list is auto insurance. Luckily, a number of major insurers are offering deals on hybrid vehicles as well. For example, Travelers Insurance provides 10 percent off to hybrid car policy holders in 27 states. In fact, Travelers was the first auto insurance company to begin implementing a national discount. Farmers Insurance offers a similar deal.
Corporate Incentives
Private companies across the country are recognizing the importance of preserving the community through green technology and are assisting their employees in purchasing hybrid vehicles. Some of these companies include:
- Google: The Fuel-Efficient Vehicle Incentive Program offers full-time U.S. employees a $5,000 subsidy toward the purchase of a vehicle with an EPA fuel economy rating of 45 mpg or higher, or $2,500 toward leased vehicles.
- Bank of America: All full-time and part-time, U.S. employees working at least 20 hours per week are eligible to be reimbursed $3,000 toward the purchase of a new hybrid vehicle. However, employees must live within 90 miles of Boston, Charlotte or Los Angeles.
- Los Angeles County: The Vehicle Purchasing Services Program (VPSP) provides incentives for L.A. County employees, retirees, family members and contractors/sub-contractors to purchase green vehicles, like pre-negotiated pricing agreements with dealerships in the county.
Tax Breaks for Hybrid Drivers
The IRS also want to help out environmentally-conscious drivers by providing tax breaks for hybrid vehicles. Some taxpayers who purchased hybrids last year are eligible for a credit of up to $2,200, though it only applies to the first 60,000 sold by the manufacturer and some cars like Toyota and Honda models aren’t eligible. However, taxpayers who purchased a plug-in, electric-drive vehicle like the Chevy Volt can get a tax credit of up to $7,500.
Michigan senator, Deborah Stabenow, is also proposing a new hybrid tax incentive that would provide a rebate up to $7,500, plus extending already expired credits for hybrid owners.
Obtaining any one of these discounts could definitely help you save a little extra on a hybrid or alternative fuel vehicle purchase. However, combining multiple discounts like lowered auto loan rates, employer rebates and tax credits, along with the huge gas savings, could amount to a substantial amount of money saved on a new car purchase.
