Sara Routhier, Managing Editor and Outreach Director, has professional experience as an educator, SEO specialist, and content marketer. She has over five years of experience in the insurance industry. As a researcher, data nerd, writer, and editor she strives to curate educational, enlightening articles that provide you with the must-know facts and best-kept secrets within the overwhelming world o...

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Joel Ohman is the CEO of a private equity-backed digital media company. He is a CERTIFIED FINANCIAL PLANNER™, author, angel investor, and serial entrepreneur who loves creating new things, whether books or businesses. He has also previously served as the founder and resident CFP® of a national insurance agency, Real Time Health Quotes. He also has an MBA from the University of South Florida. ...

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Reviewed by Joel Ohman
Founder, CFP®

UPDATED: Feb 8, 2021

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While auto loans for hybrid vehicles are about the same as any loan for a similar-priced vehicle, hybrid owners may be eligible for various incentives or rebates that make purchasing an energy-efficient vehicle an attractive choice. In addition to incentives, hybrid vehicles can prove to be money-savers in other areas of auto ownership.

Current Incentives

For 2011 Hybrid vehicles, the IRS is offering tax credits ranging from $900 to $1,800, depending on the make and model of a hybrid. These tax credits are being offered for certain hybrid BMWs, Cadillacs, Chevrolets, GMCs, Mercedes, Nissans, and Porsches. A table depicting the various tax credits can be viewed on the IRS page for 2011 Model Year Hybrid Vehicles.

Additional incentives are sponsored by individual states, so hybrid owners should do some research into what their personal location may offer them.

Some states, such as California, offer certain on-the-road perks for hybrid vehicles. Qualified hybrid vehicles—those possessing white stickers on their rear bumpers—are permitted to use California freeway carpool lanes, regardless of the amount of people in the car. This often underestimated perk is perfect for auto loan holders who travel California’s congested freeways during peak usage hours.

California’s carpool lane incentive used to be available to both yellow and white stickered cars, but the yellow stickers have recently expired. White sticker hybrids remain eligible for car pool usage until January 1, 2015.

On an even smaller level, owners should check out what their individual cities offer. Some cities, such as Riverside, California, offer hybrid vehicle incentives. Ranging from thousands of dollars in rebates to offering free metered parking, individual cities are playing their part in promoting efficient energy use on our nation’s highways.

California residents can look up city-specific rebates at Other region-specific rebates across the nation can be found on

Rebates for Older Hybrids

For auto loan holders who purchased a hybrid in the past but didn’t know about or apply for their hybrid rebate, there are some still some options available.

The Energy Policy Act of 2005 awards hybrid owners with a tax credit for any hybrid vehicle that was put into service after December 31, 2005 and before January 1, 2011, and must have been acquired by the owner within that time frame.

Aside from adhering to the manufacturing date, auto loans holders can only apply for the credit if they are the original owners who purchased the energy-efficient vehicle as a new vehicle. If the original owner leased the vehicle, then the tax credit is available to the leasing company, not the owner.

Finally, the vehicle must be used predominately in the United States.