Clean diesel technology has made it even easier for drivers to get a better fuel efficiency without having to pay the monstrous additional cost of buying a hybrid. It’s also made diesel cars eligible for federal tax credits, since clean diesel is now an authorized alternative fuel source to regular gas. Unfortunately, these credits will be expiring at the end of the 2010 year. These credits are available for diesel vehicles placed in service after December 31, 2005, and can run all the way up $3,400.

Some of the vehicles being offered on this list of qualifying automobiles are already being phased out. The government only allotted for a credit of up 60,000 hybrid and alternative fuel vehicles per manufacturer. Once a manufacturer reaches a certain milestone in that allotment, the amount of credit begins to decrease. The following is a list of current vehicles available for credit and the credit amounts available:

  • 2010 Audi A3 2.0L TDI                                                         $650
  • 2009-20110 Audi Q7 3.0L TDI                                             $575
  • 2009-2011 BMW 335d Sedan                                                $900
  • 2009-2011 BMW X5 xDrive35d                                            $1,800
  • 2011 Mercedes Benz E350 BlueTEC                                     $1,550
  • 2010-2011 Mercedes Benz GL 350 BlueTEC                        $1,800
  • 2010-2011 Mercedes Benz ML 350 BlueTEC                       $900
  • 2010-2011 Mercedes Benz R 350 BlueTEC                          $1,550
  • 2009 Mercedes Benz GL 320 BlueTEC                                 $1,800
  • 2009 Mercedes Benz ML 320 BlueTEC                                $900
  • 2009 Mercedes Benz R 320 BlueTEC                                    $1,550
  • 2010 Volkswagen Golf 2.0L TDI                                          $850
  • 2010 Volkswagen Golf 2.0L TDI                                          $650
  • 2009-2010 Volkswagen Jetta 2.0L TDI                                 $650
  • 2009-2010 Volkswagen Jetta 2.0L TDI                                 $650
  • 2009-2010 Volkswagen Jetta 3.0L TDI                                 $575

This list and these amounts could change before the end of the year, so if you’re thinking of purchasing soon, you can get an updated list from the IRS website at: http://www.irs.gov/businesses/corporations/article/0,,id=203912,00.html. Be sure to check it out before you make the purchase to see if your vehicle still qualifies.

As with all other federal credits, only the original owner/leaser may utilize the credit. No sales of used vehicles will qualify. Also, be sure to check with your salesperson or dealership on leasing information. The credits are available on leases, however, since the dealership still maintains ownership of a leased vehicle, the credit is extended to the dealer, not the lessee. Most dealerships will extend this credit to the lessee without hassle, but that is definitely something you’ll want to verify before attempting to claim the credit on your taxes.

Speaking of taxes, if you do manage to take ownership or lease of a vehicle before the December 31st deadline, you will need to make sure you have Form 8910 filled out and filed with your federal tax return. If you do not do your taxes personally, you’ll want to mention both the credit and the form to your accountant before filing takes place. Since this is the final year of the credit, you won’t want to miss out on it because of a clerical error.

Also, don’t forget that this is a federal credit. There are also credits for state taxes on the purchase of these clean-diesel machines as well. Those credits vary by state and should be listed on your state’s government website or available from your local commerce department or state department of taxation. Don’t forget that the credit isn’t the only reason to try one of these new clean-burners. Make sure you’re getting a car that fits your every need. You can find several resources, including some comparisons and the best available models, right here at iSeeCars.com.

Make sure to also check out the list of year-end new car deals, new car lease deals, and certified used car deals being offered by the car makers.  Given the year-end and car manufacturers’ desire to sell more cars, there’s great deals to be had if you do your homework and are aware of all the incentives, discounts, rebates you can qualify for.  Here’s some tips on year-end car buying strategy.

Search used cars for sale and find the best deals near you at iSeeCars.com.
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