Ford Fusion Hybrid Gets $3,400 Tax Credit

2010fusionhybrid Word’s come from the government that the new 2010 Ford Fusion Hybrid and Mercury Milan Hybrid are eligible for a $3,400 tax credit. Ford says this is the biggest federal tax credit a hybrid has received since 2005.

The Fusion and Milan hybrids were unveiled at the 2008 L.A. auto show. The Fusion Hybrid has an EPA rating of 41 mpg in the city and 36 mph on the highway. The Milan hasn’t been tested, but the two are mechanically identical.

That makes the Fusion Hybrid the most fuel-efficient domestic vehicle and the third most efficient overall, behind the 2010 Toyota Prius and Honda Insight.

With an asking price of $27,270 for the Fusion Hybrid, Ford’s tacked a hefty premium on the fuel-sipper, especially compared with the naturally aspirated four-cylinder version, which starts at $19,270. This tax credit should go a long way toward alleviating any potential buyer’s remorse.

Is there a catch to the tax credits? Of course! The tantalizing $3,400 credit will be cut in half on April 1.

Being the largest domestic maker of hybrids, Ford has already reached the government’s threshold of 60,000 vehicles for tax credit eligibility. If you recall, Toyota went through the same thing with the Prius.

The credit will be cut in half after March 2009, and then in half again on October 1. On April 1, 2010, the automaker won’t get any more tax credits. So if you’re dying to get a new Fusion Hybrid, you should probably act sooner rather than later. However, the company hasn’t set a firm date for when the 2010 Fusion will go on sale, only saying it will happen in the spring. Which to us begins in March.

Ford’s tax credits:

  • 2010 Fusion Hybrid: $3,400 (Now-March 31); $1,700 (April 1-Sept. 30)
  • 2010 Milan Hybrid: $3,400 (Now-March 31); $1,700 (April 1-Sept. 30) 
  • 2009 Escape Hybrid FWD: $3,000 (Now-March 31); $1,500 (April 1-Sept. 30) 
  • 2009 Escape Hybrid AWD: $1,950 (Now-March 31); $975 (April 1-Sept. 30) 
  • 2009 Mariner Hybrid FWD: $3,000 (Now-March 31); $1,500 (April 1-Sept. 30) 
  • 2009 Mariner Hybrid AWD: $1,950 (Now-March 31); $975 (April 1-Sept. 30)

Comments 

G

I wonder how this will translate in Canada...I'm very excited about getting a FFH, and if there will be a greater tax credit here, I might just buy one right away instead of waiting until Nov-Dec of 2009...still waiting for the review though!!! :D

Roger E

So Ford is selling a hybrid that after rebates will cost about $4,000 more than the Honda Insight? No wonder the Detroit car co's are losing Billions!

Adrian

"The Fusion Hybrid has an EPA rating of 41 mpg in the city and 36 mph on the highway."

Don't you mean 36 mpg?

Nelson

Roger E, the Fusion is about two feet longer and half a foot wider than an Insight. They're not in the same class of cars -- and despite that, the Fusion has a very slightly higher city MPG rating than the Insight. (The Insight, of course, will have a substantially higher one on the highway.) If you're going to compare apples and oranges, you might as well complain about how much more expensive a Toyota Highlander Hybrid is compared to the Honda Fit.

Ty

I agree w/ Roger E's comment, while this is a good step forward for the likes of Ford they need to do better. A bold move would have been to hold the price below all of the competitors and then they probably would have had a sales hit on their hands. They need a sales hit awfully bad.

Belly

Uh-Oh I can't see Shet's post, did he finally get kicked off for posting garbage?

Original sheth

Ty,

Not sure where you have been for the last 4 months but all automakers need a "hit" right now. No one is doing well in this market and Toyota/Honda have experienced 30-35% sales declines in the last 2-3 months. Furthermore its hard to fathom how Ford could create a better hybrid than the Camry hybrid and then price it thousands LESS. That doesnt make much sense. Ford is offering a better car for $1k more. I dont think that is a deal breaker for most people.

The Fusion is aimed at the Camry and Altima hybrids, not the Insight. The Camry hybrid is $1k cheaper but lacks the credit and has less standard equipment. If people think the Fusion is too expensive the same could be said of the Camry and Altima hybrids which are also substantially more expensive than the Insight will be.

Amuro Ray

I was right on the prediction of the Saturn Aura, now let's see if my prediction is right on the Fusion Hybrid too. Bomb. It'll sell, but very small #, due to its high beginning price.

Now I know the standpoint of cars.com - the more cars companies will sell, the better the business for cars.com. However, a bit more honesty - or more informative - to how the tax credit actually works will be necessary. Sure, $3400 is a lot, but that's only for 1 month. Once it's down to $1700 in April, the price suddenly looks not-so-attractive. However, what D.T. didn't mention is how the tax credit works. It's very much like those 0% financing - only people under some very specific condition can get the tax credit. Basically, if u've a tax refund, or have ways to make yourself pay very little tax - u r out. I've said it b4, and I'll say it again - ask ur accountant before you make ur decision!

BTW, just do a simple Math. $27000 is MSRP. Out the door will be around $30000 (say 7% tax). IF you can get the max credit, that gets u back down to ~$27000. Both Camry and Altima hybrids have a lower starting price, 'bou $2000+ less.

Original sheth

AmuroRAy,

the camry hybrid starts at $26k. I believe the Altima hybrid is even more expensive. The Altima hybrid is sold in only 8 states and is very low volume. Camry hybrid sales total 3k-4k a month at the most. Ford can only sell about 25k of these a year due to battery capacity issues and I suspect Ford will be able to sell every one. The Aura hybrid has barely been advertised and gets 26mpg in the city, not 41mpg like the Fusion. The Fusion will likely be heavily hyped by Ford and will easily outsell the Aura/Malibu hybrids.

Original sheth

altima hybrid starts at $26,650 according to this site. Sorry, but that is barely cheaper than the Fusion.

Amuro Ray

Original Sheth, pls be sure that I'm not starting another domestics VS import war here, 'coz u've a high tendency for doing so from the other thread. I viewed them all as made in N. America. I'm just providing the choice of H available in the same class as the Fusion.

Now, I do stand correct. It is true that both Camry & Atima H start at $26000+, but both vehicles are having $1500 cash back or Special APR now. So when you do the Math, you can actually get a Camry or Altima H at $2000 + less. Sure you may argue, but that's a 2010 Fusion, and the "specials" are on the 2009 C & A H. In reality, we'll have 2009 C & A H, 2010 C&A H and 2010 Fusion H. All available at the same time. That's choices for the customers to make, not you and I. Go with $2000+ less on a 2009 or full price on a 2010. These are all H of the same class, so it's a fair comparion, or Apple to Apple so you say when it comes handling the $ to the dealership...

BTW, I accidentally made 1 mistake on my post above - I meant to say the Saturn Astra...even though I did make the same prediction for the Aura. So, 2 right for me :)

My point for the previous post, however, was really 'bou the information that D.T. or cars.com should have, on the tax credit and how it works. It gives false impression on how much a person will spend/save on a hybrid, when it's no where close to that. If u looked at my earlier posts on other hybrid vehicles, you will see that I almost made that mistake with the info provided by various car websites when I was 'bou to purchase an A H, and thankfully, I went to my accountant b4 going to the dealership, which would have made myself an utter idiot in front of the IRS and with 2 columns of tears when tax returns came...

broq

Amuro Ray,
So, excactly what are you trying to say here, because SOME people are going to get the 3400 tax credit. It is not like Cars.com is lying about it, or misleading, because there is a table at the end of the article above. In addition, the prices of all the cars are listed, it's no secret that the Fusion starts off more pricey than the Camry. I left off the Altima, because most people can't buy one anyway. Then you have to take in to account equipment- i have read that while the fusion cost more than a camry, it has more standard equipment. So all that being said- what is your point?

Broq

Amuro Ray

Broq,

It is in a way misleading, because no where in the article (of this, and any other from any car websites - and I'm not just pointing the fingers @ cars.com here) has stated that the max credit can be achieved only under certain conditions. Not even fine prints! The wordings of the article actually gave a false impression that this tax credit will be applied to its max automatically,
"This tax credit should go a long way toward alleviating any potential buyer’s remorse."
"Title: Ford Fusion Hybrid Gets $3,400 Tax Credit"
I'm not trying to play with words here, but seriously, no one would have known that $3400 is a max which you may not get. and that the eligibility part is also on a person (depending on how much income tax he/she can claim), not just on the vehicle itself
"the new 2010 Ford Fusion Hybrid and Mercury Milan Hybrid are eligible for a $3,400 tax credit."
I supposed that this blog is try to be as informative as possible, so the human factor here is crucial and helpful to people who wants to buy a hybrid. Have you considered buying a hybrid? How 'bou O.S.? I don't know 'bou you 2, but I had, and I did do quite a lot of home work in addition to these sites. My wish is for these sites to improve so that future buyers will become more informative and won't need to do too much extra work, because not too many people has his/her own accountant, u know...

As for comparison, you did miss my point - I'm comparing the starting prices of the 3. Sure the Fusion has more standard equipments than the other 2, but did the consumers asked those to be included? And let's not confused that included (standard) = free. It is not. So, either having a lower asking price, then pay whatever you want to include (either in a pkg or standalone options), or pay for those stuff that you don't need, but forcfully being there simply because they are included. This is where the Fusion has the disadvantage in price, because for that $2000 extra, someone can use it to do sthg else, and not necessary upgrade to the car.

Bloke

AR, I think we talked about this once before right? Here is the link to the IRS website that talks all about this credit:

http://www.irs.gov/newsroom/article/0,,id=157632,00.html

Now the thing to remember is, Cars.com is not your tax professional. When they say there is a $3,400 tax credit, they are saying it just as the IRS says it. They shouldn't have to spell out how a tax credit is applied and give some form of income tax bracket with it. Here is the statement from the IRS on tax credits

"A tax credit is subtracted directly from the total amount of federal tax owed, thus reducing or even eliminating the taxpayer’s tax obligation."

So yeah you may not get the whole tax credit, but it is available. Tax credits have always been handled that way by the IRS, not just the one for hybrid vehicles. It is a complex system the IRS runs, but it is not Cars.com's fault that taxes are complicated.

Red

If you owe owe the feds $3,000 and then apply the fusion's tax credit, you will get a $400 refund.

Red

I meant the above post as a question. Can the fusion's credit result in a larger refund or does it just eliminate the $3,000 liability, with the rest of the credit unused?

Bloke

Red, it is best to talk to a tax pro about it, but I think what the website says is you can use as much of the credit against the tax liability you have (ie you owe 3,000, so you can use 3,000 o the credit) in the first year, and then it goes down by percentages in subsequent years, 50%, then 25%, then 0. Check out that link, and talk to H&R Block if you still have questions - my recommendation.

Original sheth

I dont get AR's point either. The tax credit system has been the same for all the hybrids. Yes its complicated and yes it expires. Nothing new there. Point is the Fusion is not substantially more expensive than the Camry Hybrid as AR indicated. It also gets better mileage, has a larger trunk, handles better and has more standard equipment. If AR wants the lesser car just to save $1000 that is his choice. I think most objective buyers will go for the Fusion.

Tony

My wife just bought her third VW diesel and got a 1500 dollar tax credit into the bargain. This car is right now the greenest one on the road and if you drive it very carefully you can approach 60 mpg. She got 50 mpg consistently with the last vw Jetta Station Wagon...

Original sheth

tony:

Mileage on the TDI is nice but of course we have to remember diesel costs considerably more than gas and the final cost is what people notice when it comes to fuel efficiency. If you do a lot of highway driving the Jetta makes more sense (assuming you like the Jetta) while the Fusion and other hybrids make more sense for urban and suburban driving.

warpwiz

I **was** hot for a Jetta Diesel as 90% of my driving is on interstate. But then I talked to an owner who said it was his last. While the mileage is really nice, the expenses eat the savings alive. Not only does one pay more for fuel, the maintenance and repairs are substantially higher than for a comparable gasoline version of the vehicle. In addition, although our city has a population over 200k, the local VW dealer does not staff with mechanics qualified for diesels. That means any engine repairs require a drive or tow of 100 miles to Atlanta.
I only wish the Chevy volt was closer to the Fusion in price, rather than the Escalade. A starting price of $40k to be a Chevy beta tester seems a bit rich. I will check out the Fusion Hybrid, tax credit or no.

Ecomcon

It's always been my experience that one can buy a new vehicle at a dealer's lot for far under the sticker price. I've paid much less for my current vehicles than the sticker price. However, my wife and I shopped around two years ago, and the local Toyota and Honda dealers were charging above sticker price for their hybrids (the Camry hybrid and Civic hybrid). So the Fusion hybrid may still be competitive in terms of price.

Further, auto writers from the LA Times and Seattle newspaper drove the Fusion hybrid on the streets of L.A. during the L.A. auto show in November, and their real-world mileage ranged from 46-52 mpg. Their results are available online.

Red is wrong. I spent an hour on the phone last week with the IRS, and was told that this credit CANNOT generate a refund.

Oops, Red was not wrong, I just noticed his second entry! I answered his question.

Red

Thanks for the info.

Kevin Traina PA-C

How does the fusion hybrid match up with the honda civic hybrid?

Kevin Traina PA-C

How does this fusion compare to a honda civic hybrid?

at the hopes of receiving page views by way of typos which will make their designate useful as advertising space. You will discover many people who buy hundreds of thousands of internet domain names by means of low cost and reseller applications, feverishly snapping up expired names, hoping they've found a few winners.

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