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Gas prices going up, while VW and Audi vehicle credits heading lower

Summer is almost here. We know because as temperatures are climbing, so is the price of gasoline.

Girl (8-10) sitting in boot of car reading amongst luggage, portrait
With the kids getting out of school, most families will find a way to take a vacation. And most will drive to their recreation destinations.

So the old supply and demand kicks in at the pump. Some oil industry analysts predict that gasoline will hit $3 a gallon this summer.

But there are ways to cope with higher fuel costs.

CBS editor-in-chief Eric Schurenberg offers five ways to make your fill-up go further. I made many of the same suggestions a couple of years ago in Ways to save on your driving vacation.

Schurenberg's fifth gas-saving tip is to switch to a more fuel efficient car. I've given the same advice over the years, especially when buying a hybrid or alternative fuel vehicle also can get you a nice tax credit.

Such purchases were all the rage a few years ago when pump prices spiked. Uncle Sam even got in on the act, by giving drivers tax savings for their automotive energy efficiency.

Many sold = smaller credit: But as you might recall, the tax code penalized purchasers of the most popular hybrid vehicles, which, of course, were the most fuel efficient.

Once a car maker sold 60,000 of any type of hybrid, the credits for all its gas-electric vehicles began phasing out.

That's why the tax break for all Toyota hybrids, spurred by its industry leading Prius sales, vanished in the second year of the program. Honda hybrid credits soon followed. Domestically, Ford hybrid credit phaseouts started this April.

Now it's time to reduce the hybrid credit for Volkswagen vehicles, including its Audi nameplate autos.

The tax credits for VW and Audi hybrids will start phasing out on July 1. On that day, the tax credit on each of the automaker's qualifying hybrids will be worth just half of what it is now.

The IRS released this table detailing the reduced credit amount:

VW/Audi Vehicle Credits July 1, 2010, through Dec. 31, 2010

Model Years Model Credit Amount
2009 Audi Q7 3.0L TDI   $575
2010 Audi Q7 3.0L TDI   $575
2010 Audi A3 2.0L TDI   $650
2010 Volkswagen Golf 2.0L TDI (automatic)   $850
2010 Volkswagen Golf 2.0L TDI (manual)   $650
2009 Volkswagen Jetta 2.0L TDI Sedan    $650
2010 Volkswagen Jetta 2.0L TDI Sedan    $650
2009 Volkswagen Jetta 2.0L TDI SportWagon   $650
2010 Volkswagen Jetta 2.0L TDI SportWagon   $650
2009 Volkswagen Touareg 3.0L TDI   $575
2010 Volkswagen Touareg 3.0L TDI   $575

Technically, the VW and Audi hybrid credits then would fall to 25 percent of their original tax value on Jan. 1, 2011. But in reality, they will be zeroed out on that date, along with all other remaining hybrid credits.

The hybrid tax credit provision ends for all makes and models on Dec. 31, although there is some talk that it might be revised and extended in some form before the deadline.

But that's not a sure bet, given Congress' propensity for procrastination on tax legislation and the federal budget cost of such continued tax breaks.

So if your heart's set on a hybrid, you might want to shop sooner rather than later.

And if it's a VW or Audi you want, sooner means by June 30.

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2011 Jetta

It's unfortunate that these credits go away -- they want to promote high energy efficient cars, but the government always puts a monkey wrench into things.


non of those are true hybrid cars

Personal finance

Five diesel-powered vehicles are eligible for the alternative motor vehicle tax credit. They are:
- Mercedes GL 320 Bluetec: $1,800
- Mercedes ML 320 Bluetec: $900
- Mercedes R 320 Bluetec: $1,550
- Volkswagen Jetta 2.0L TDI sedan: $1,300
- Volkswagen Jetta 2.0L TDI SportWagen: $1,300


The VW and Audi models listed above are not hybrids. TDI stands for "turbocharged direct injection" and is specific type of diesel engine technology that Volkswagen Group uses in its vehicles. While using the full name of "the credit for advanced lean burn technology motor vehicles" would be cumbersome, it is more accurate to refer to it as a "diesel credit" since these are diesel vehicles (and diesel is a lean-burning fuel).

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