Hybrid cars get tax break in 2006

• Starting in 2006, people who buy or lease hybrid vehicles --- cars or SUVs powered by gasoline and electric engines --- will be able to get tax credits of up to $3,400.
• It's included in the energy bill President Bush signed into law Aug. 8.
• Not all hybrids have been approved for the credit, and how much you'll get back depends on the efficiency of the car and when you buy it.
• In addition, a cap on how many hybrid purchases qualify and waiting lists for some hybrids mean you'll have to act fast.
• The Internal Revenue Service (IRS) has approved seven hybrid vehicles for the tax credit: the Ford Escape, Toyota Highlander, Honda Accord, Honda Civic, Honda Insight, Lexus RX400h and Toyota Prius.
• "Generally assume that the vehicles that achieve better gains in fuel efficiency are the ones that are going to be more handsomely benefited by the tax incentives," Berman said.
• To get the tax credit you'll have to wait to buy the vehicle until after Jan. 1.
• A "pure" hybrid, such as the Toyota Prius or Ford Escape, works better for a city driver, said Brad Berman, who runs a Web site about hybrids.
• A pure hybrid is capable of running solely on its less powerful electric engine for an extended period, ideal for less-demanding stop-and-go traffic.
• Hybrids may not work for you if you need a powerful engine for mountain roads or rugged terrain, said Therese Langer of the American Council for an Energy-Efficient Economy, a nonprofit energy-conservation advocacy group.
• The Environmental Protection Agency fuel-economy ratings don't reflect real-world driving conditions, so no hybrid will yield as many miles of savings as listed.
• A replacement can cost up to $4,000, but most automakers back their batteries for at least eight years or 80,000 miles, whichever comes first.