And speaking of smart cars from Honda, I’ve been driving the new Civic Hybrid this week. The whole Civic model line has taken a giant step forward in terms of styling, and the Civic Hybrid now competes with the Prius in aerodynamics and presence. It’s also safer, with standard side-curtain airbags and antilock brakes.
The combination of a 1.3-liter four-cylinder engine, an electric motor and a continuously variable transmission (CVT) are good for 49 mpg in the city and 51 on the highway, though those figures will probably be revised downward as the EPA reforms its method of determining window sticker mileage. (Then again, every other car will lose mpg, too.)
You won’t be winning any stoplight derbies with 110 horsepower on tap—acceleration is fairly leisurely, especially up steep hills—but there’s 17 horsepower more than in the 2005 Civic Hybrid. Torque is up as well. Like all hybrids on the market, the Civic shuts off at traffic lights, then restarts with hardly a murmur when your foot comes off the brake. Emissions (AT-PZEV in California) are barely visible on the federal chart.
The interior of this new Civic Hybrid is a nice place to be, with comfortable cloth seats and good space to stretch out. The trunk is quite large. The automatic climate control includes an air filtration system, though when the fan’s blowing the “auto stop” function is disabled. Steering wheel controls make things easier, though the toggles are pretty small.
The Civic Hybrid with Navigation is a separate model, so our loaded test car (with power locks, a 160-watt stereo (that reads MP3 CDs and digital audio cards), airbags all around and ABS, had no options at $23,900. The base car is $22,400, and it compares to an entry-level Civic DX (30/38 mpg) for $15,910. So, indeed, you will have to fill up your Hybrid a whole lot of times before you make up the price differential.
But wait, there’s more to this deal than meets the eye. Since January 1, a new federal tax credit, part of the recently enacted (and rather dire) energy bill, has been in place for hybrid cars. In fact, the tax credit replaces the tax deduction that was in place in earlier years, and that could mean more savings for you. As the Alliance to Save Energy describes it, “A tax credit reduces the tax you pay, dollar-for-dollar. Tax deductions—such as those for home mortgages and charitable giving, for example—lower your taxable income. If you are in the highest 30 percent tax bracket, your income tax is reduced by 30 percent of the value of a tax deduction. But a tax credit reduces your federal
income tax by 100 percent of the amount of the credit.”
Since the tax benefit is based in part on fuel economy, the Civic Hybrid should qualify for a $2,100 credit. (The Prius, with a better bottom line at the pumps, is eligible for $3,150, near the maximum.) You have to be the original owner, so no transfer benefits apply.
In addition, state laws also help the hybrid customer. In Connecticut, for example, people who buy a hybrid that gets at least 40 mpg between now and October 1, 2008 are exempt from state sales tax. Colorado offers a $4,700 tax credit, and California has parking benefits and free passes for HOV lanes. Pennsylvania is relatively chintzy, with a $500 rebate on the purchase price. But, oh wow, look at Massachusetts: The total value of your deal includes a $2,000 state income tax deduction; a waiver of the initial $27.50 application fee for the Fast Lane Transponder; the right to travel in HOV lanes regardless of passengers; and discounts or free parking in participating towns and cities. Hooray the Bay State!
The IRS is reportedly still working on how it will implement tax credits for hybrid-electrics, and is asking automakers to “certify” which of their models qualify. The tax agency then has 30 days to reject or accept the certification. If it does reject a certified vehicle, the people who have already claimed the tax credit will be able to keep it. Is that confusing enough? Fortunately, it doesn’t confuse me as much as Detroit’s insistence on building gas guzzlers in the face of a building fuel crisis.
North American International Auto Show
Alliance to Save Energy Tax Credit Page