These Hybrids Get Over 50 MPG—and Cost Under $30K
Even in 2025, there's a sweet spot where efficiency, comfort, and price all meet. We've dug out some great cars that live in that under-$30,000 zone and won't have you sacrificing your sanity behind the wheel.
Whether you're on the hunt for something to commute, road-trip, or just make fewer awkward stops at gas stations, these rides deliver. And the best part? They're all hybrids that'll crack the 50 mpg mark—without cracking your budget.
General vehicle information and performance data have been sourced from automakers and other authoritative sources, including Car and Driver, Edmunds, and MotorTrend. This list is sorted by starting MSRP, from highest to lowest.
If you're on the hunt for something roomy and smooth that doesn't guzzle gas, the 2025 Toyota Camry Hybrid LE FWD is an easy win. Not only is it super comfy, but it gets over 50 mpg, and it honestly feels way more upscale than you'd expect for under $30,000.
If you know anything about Toyota, you'll know the automaker likes to pack in a ton of goodies—like a big touchscreen, wireless Apple CarPlay and Android Auto, and a solid list of safety features. Further, it's super chill to drive, even in city traffic.
Bottom line: It's like the grown-up choice, but with the heart of a budget-friendly eco-hero.
Over 50 mpg combined
Surprisingly fancy for the price
Comes with Toyota Safety Sense
The 2025 Toyota Prius LE FWD is still the king of mpg, hitting up to 57 mpg combined, and it actually looks cool now. The new-gen Prius isn't all about gas savings, though—it's genuinely a nice place to be.
Hop inside, and you'll find a sharp digital dashboard, voice control, and all the modern tech you could ever want. And since it's a hatchback, there's plenty of space for groceries, gear, or a weekend escape.
If you're all about maxing out fuel economy without driving a potato, this is the hybrid for you.
Insane 57 mpg combined
Cool hatchback shape with space to spare
Packed with tech—even in base trim
Want SUV vibes but also want to skip the gas station as much as possible? The 2025 Kia Niro Hybrid LX is your jam—53 mpg with crossover practicality, and it still fits in city parking spots.
For a shade under $27,000, you get a digital screen setup, all the must-have safety stuff, and enough cargo space for a Target run or weekend getaway. Even the base LX trim feels super functional.
It's a low-key gem for anyone who wants hybrid efficiency but doesn't want a sedan.
53 mpg combined in a mini SUV body
Roomy inside without being bulky
Great standard tech and safety gear
Think of the 2025 Hyundai Elantra Hybrid Blue as that smart kid in class who never brags—54 mpg, stylish looks, and super affordable. If the truth be told, it's one of the best deals in the world of hybrids right now.
Even with the base trim, you get wireless smartphone hookup, a touchscreen, and Hyundai's full safety tech suite. Further, it's backed by the automaker's 10-year warranty, which, let's face it, is hard to beat.
It's the perfect choice for anyone who wants to look sharp, drive smart, and save at the pump.
Crazy good fuel economy at 54 mpg combined
Sporty design, even for a base model
Comes with Hyundai's epic warranty
The 2025 Toyota Corolla Hybrid LE FWD can be summed up in three words: simple, dependable, and efficient. It does around 50 mpg, doesn't try too hard, and just works.
For just short of $24,000, you get wireless Apple CarPlay, voice control, and all the safety stuff that keeps your insurance happy. It's the kind of car you buy once and barely think about—because it never lets you down.
Granted, it's not flashy—but it's seriously solid for the money.
Around 50 mpg combined and super reliable
Great daily driver with low upkeep
All the safety tech is standard
Hashtags

Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles


Car and Driver
3 hours ago
- Car and Driver
A Stellar Hispano-Suiza Takes Best of Show at the 2025 Pebble Beach Concours d'Elegance
A 1924 Hispano-Suiza H6C Nieuport-Astra Torpedo was just deemed Best of Show, the top honor among the billions of dollars' worth of exclusive vintage vehicles displayed at the 2025 Pebble Beach Concours d'Elegance. The car is owned by Penny and Lee Anderson of Naples, Florida, who purchased it three years ago at the Sotheby's auction right in Pebble Beach. "The people who represented the sale of this car said it was a potential Pebble Beach winner, and they were right," Lee Anderson told Car and Driver from the judges' stand, moments after receiving the designation. Car and Driver The yacht-like, mahogany-bodied, aluminum-riveted, torpedo-shaped sporting cruiser just emerged from a two-year restoration less than a week ago—using vintage wood—and was shipped directly to the concours. "If you're into collecting classics, we all know these wood-bodied cars, and this one hasn't been shown before," Anderson says. "How many do you see?" Our Very Unofficial 2025 Picks Our Editors Choose Favorites at Monterey Car Week When asked what drew them to the car, Anderson says, "It's just a beautiful piece of furniture." This car demonstrates an ongoing commitment to honoring unique interwar classic cars at Pebble, which has long granted this prestigious award to meticulously restored coachbuilt vehicles created during the 1920s and 1930s. Marc Urbano | Car and Driver "This is just a very distinctive car with an extraordinary level of craftsmanship," said Ken Gross, a venerable author, curator, and concours judge who has worked for decades in the world of classic cars. "One couldn't even imagine building a car like that today." This adherence to form in the Best of Show selection signifies that "traditions here at Pebble Beach will continue," Gross says. "Cars like this remain the pinnacle of elegance, like Old Masters paintings." However much this selection perpetuates the status quo, special vehicles like this—especially ones that have not been readily seen in decades—can continue to inform our deeper understanding of the significance of the automobile in a world that has largely been shaped by it. But the larger narrative at the grand, if at times overwhelming, celebration of car culture that is the annual Monterey Car Week, is the way in which affection for the automobile's mechanical, technological, and sculptural achievements is one of the few things in our contentious world upon which we can all, perhaps, find common ground. Brett Berk Contributing Editor Brett Berk (he/him) is a former preschool teacher and early childhood center director who spent a decade as a youth and family researcher and now covers the topics of kids and the auto industry for publications including CNN, the New York Times, Popular Mechanics and more. He has published a parenting book, The Gay Uncle's Guide to Parenting, and since 2008 has driven and reviewed thousands of cars for Car and Driver and Road & Track, where he is contributing editor. He has also written for Architectural Digest, Billboard, ELLE Decor, Esquire, GQ, Travel + Leisure and Vanity Fair. Read full bio


Car and Driver
a day ago
- Car and Driver
Unfair Fight? 2002 Subaru Impreza WRX vs. Audi S4 Quattro and BMW 330xi
From the October 2001 issue of Car and Driver. The Law of Diminishing Returns: A yield rate that, after a certain point, fails to increase proportionately to additional outlays of capital or investments of time and labor.* *American Heritage Dictionary, Houghton Mifflin Company, 1992. Relax, we're not about to launch into a sleep-inducing lecture on money supply, interest rates, and the effects of Alan Greenspan's bedtime rituals on the Gross Domestic Product. The definition is for those of you who are wondering how we could even think of comparing a car costing $25,000 with two that each cost 60 percent more. The question here is: If you spend that extra 60 percent—40 thousand bucks in all—do you get a car that is 60 percent better? In the 40-grand corner we have the Audi S4 Quattro and the BMW 330xi. In the other corner—actually, down in the bargain basement—lurks our underdog, the $24,520 samurai challenger, the Subaru Impreza WRX. Unfair comparison, you say? Duuuh! But wait—check the spec sheets. All three cars have full-time four-wheel drive, four doors, manual transmissions, engines with 225 or more horsepower, and interior and exterior dimensions that come within inches of one another. View Photos JEFFREY G. RUSSELL | Car and Driver Our glowing reviews of the WRX suggest it's a worthy opponent to two of our favorite sporting sedans. The snorty little Subaru sedan has rocked the sporting establishment by producing a remarkable combination of performance and character for the price. We only decided to send it to the wolves after we looked at other similarly priced sedans and realized that matching them against the WRX wouldn't be a comparo, it'd be a slaughter. So we called in the German sharks. Both the Audi and the Bimmer have been frequent honorees on our 10Best list (10 straight years for the 3-series and three years for the S4's less-powerful sibling, the A4). Audi's S4 is a pumped-up, twin-turbocharged version of the A4 and has the added distinction of being the first and only car to outperform the previous-generation M3 in a comparison test. While the M3 has moved up in price—to $46,000—and in performance, BMW has also upped the performance of the entire 3-series line. The model representing a step down from the new M3 is the 330i, offered in both two- and four-door bodies and available with a $1750 four-wheel-drive system that changes the model designation to 330xi. Ask any one of us to pick our favorite cars, and these three would be high on our list. View Photos JEFFREY G. RUSSELL | Car and Driver If you're thinking we've put ourselves in the unenviable position of having to choose a favorite child in this test, you would be right. We put the three through our usual battery of performance tests, lapped DaimlerChrysler's 1.7-mile road course, and tore up the curvy roads of northwestern Pennsylvania—a fitting locale since the discovery and eventual refinement of oil in these hills made fortunes for many and changed the country's path nearly 150 years ago. And, of course, without oil we wouldn't be writing this. Many of us have been quick to point out that there's no need to spend more than $25,000 on a car. Do the German cars deliver the goods to justify their major-league prices? Let's find out. 3rd Place: BMW 330xi View Photos JEFFREY G. RUSSELL | Car and Driver Let this comparo remind all the whiners out there that we don't automatically place the trophy in the trunk of the car bearing the whirling propeller badge before the test. In this one, the Bimmer finished last. What gives? Clearly, this BMW wasn't loaded to compete with the two others. Its 225-hp six-cylinder engine is the least powerful of the group, and it's pushing around the second-heaviest weight. At the drag strip, it lost the sprint to 60 and through the quarter-mile. Still, we love its engine. Neither of the other cars can match the throttle response of the Bimmer's six, which doesn't bear the burden of spooling up turbos. Comments such as "power oozes out in silky-smooth pulses" and "very smooth and strong and makes the best noise" filled the BMW's logbook. HIGHS: Supple ride, slick transmission, graceful moves, silky engine. LOWS: Flat seats, few features for a $40,000 car, underwhelming grip, revs too high on the highway. VERDICT: We expect more from a BMW, especially a $40,000 one. View Photos JEFFREY G. RUSSELL | Car and Driver View Photos JEFFREY G. RUSSELL | Car and Driver We also thought the five-speed was the best-shifting box of the bunch, with low effort and Teflon-coated detents. The transmission routes power to a planetary center differential that under no-slip conditions supplies the rear axle with 62 percent of the torque. Should one wheel slip, the electronic traction control of the Bimmer's Dynamic Stability Control system routes the power to the wheels with grip. The rearward torque bias preserves the rear-drive handling we've come to appreciate in BMWs, but sadly, BMW doesn't offer on four-wheel-drivers the optional stiffer suspension and larger wheels and tires of the 3-series Sport package. The setup of the base model is softly tuned and has weak tires. "Definitely the Cadillac of the group," complained one tester. The Cadillac of the group? A BMW? It was also the quietest. We're not above appreciating a good-riding car, but unfortunately for the BMW, neither of the other cars was unduly harsh, so the BMW came across as somewhat floppy. View Photos JEFFREY G. RUSSELL | Car and Driver And then there are the tires, which squeal at even modest cornering speeds. The tires and the soft suspension conspire to hurt the BMW in every test of grip. The Bimmer finished the poorest on the skidpad and in the lane-change maneuver. On the road course, the 330xi rolled in the turns and the tires howled in protest, limiting cornering speeds and putting it 3.4 seconds behind the Audi and 1.8 seconds back of the Subaru. BMW has heard complaints that the base 3-series is too soft and in response has made the Sport suspension—but not the tires—standard on all 3-series produced after last March. That change was too late for this roundup, and any egg that appeared on the BMW's grille from its performance on the road course quickly flew off when we hit the back roads. The soft suspension displayed a fluidity we hadn't anticipated after those disappointing track laps. We still don't endorse the trend to light steering, but the brakes had the best feel of the bunch, with a firm pedal and perfect linear action. If you're still incredulous over the BMW's third-place finish, consider the features content of the Bavarian car, which at nearly 40 large as tested came with lousy, nearly flat seats that are covered in "leatherette." Sounds like a covering better suited to a $25,000 car, doesn't it? 2nd Place: Subaru WRX View Photos JEFFREY G. RUSSELL | Car and Driver We're still arguing the Subaru's second-place finish. Two of the three voters put the Subaru in first place, with the Audi second. But one—and he'll remain nameless—put the Audi first and the Subaru last, so when we averaged the scores, the Subaru missed the top spot by just one point. So what's missing in the $25,000 car? Actually, it's not what's missing, it's what's there, and in the case of the Subaru, there's a lot of extra noise. The Subaru's sound levels were the loudest during all our decibel tests. The WRX does not qualify as a loud car compared with others in its price class, but it becomes one when the competition gets very expensive. Poke around the Subie's exterior and interior panels, and you see how the noise trickles through to the inside of the car. There's only a paper-thin mat on the trunk bottom and no covering for the underside of the trunklid or hood—items both the BMW and Audi have. HIGHS: Killer value, seats, handling, and turbo 00mph. LOWS: Freeway hum. VERDICT: If you can find a better $24,520 car, buy it. View Photos JEFFREY G. RUSSELL | Car and Driver So the Subaru has less sound-deadening material. The major parts of the interior—the sharp-looking metallic-ringed gauges, the Momo steering wheel, the center console— are all impressive, but the WRX's remaining plastic trim is much flimsier than that in the pricey cars, particularly the handsome Audi. The plus side to the frugal use of sound-deadening material is the WRX's light weight. The Subaru weighs 433 pounds less than the BMW and is 560 pounds lighter than the porky Audi. That said, two of the test drivers weren't annoyed at all by the noise levels. All of us loved the wonderfully designed and supportive cloth seats, the favorite chairs of the group. We also liked the Subaru's in-dash CD changer and cassette player, a combination unique in this zooty group. The Subaru also has no power seats, no stability control, no automatic climate control, and no sunroof. That nose-dived its features rating, but to us, many of those goodies fall under the "nice to have but you don't need them" category. View Photos JEFFREY G. RUSSELL | Car and Driver The rest of the car is pure joy. There's a touch more turbo lag than in the Audi, but we could get a better launch in the Subaru, which gave it a slight edge in the low-speed-acceleration tests. The trick is to do the unthinkable in a four-wheel-drive car: Hold the revs at five grand, and drop the clutch. The WRX's full-time four-wheel-drive system uses a viscous limited-slip center differential that routes power equally to the front and rear axles. The clutch drop breaks the tires loose for only an instant, and then the WRX leaps off the line, scooting to 60 mph in 5.4 seconds and through the quarter in 14.1 seconds at 96 mph—both the best of the bunch. Turbo lag, however, rears its head in the top-gear tests where the Subaru trails from 30 to 50 mph. Keep the engine rpm north of 3000, however, and you won't notice the lag. We also found the Subaru to be the most neutral-handling of the group. Midcorner throttle lifts cause the rear end to slide just enough to tighten your line without provoking fears of a major spin. "Subaru got the big stuff right—the motor, transmission, seats, and handling," wrote one tester in the logbook. That sums up how we feel about this car. One can only marvel at what Subaru could do with another 15 grand. 1st Place: Audi S4 Quattro View Photos JEFFREY G. RUSSELL | Car and Driver So, you say there's no mystery to the Audi's win. Why wouldn't the most expensive car in the test win? Its as-tested price is $1659 above the BMW's and a universe beyond the Subaru's sticker—exactly $16,262 more. Likewise, you get a ton of stuff—power, torque, valves, features, gears, grip, and pounds in this contest. But you don't get the quickest sprinter to 60 mph. Owing to its greater girth and tires that refuse to break loose at the moment of launch despite our best efforts, the Audi trailed the Subaru to 60 mph by a smidge, 0.1 second. By 100 mph, however, the Audi had picked up enough steam to be a half-second ahead of the two other cars, and it continued to widen the gap to its governed 142-mph top speed. But the Audi is the king of every other performance contest, posting significantly better numbers on the skidpad (Audi, 0.86 g; Subaru, 0.82 g; BMW, 0.78 g), through the lane change (67.8 mph versus 66.5 for the Subaru and 63.1 for the BMW), and around the road course, where it was nearly two seconds a lap quicker than the second-place finisher, the Subaru. HIGHS: First-class cabin appointments, potent turbo mill, tenacious chassis. LOWS: Touchy brakes, rubbery shifter. VERDICT: Feels like a $40,000 car. View Photos JEFFREY G. RUSSELL | Car and Driver The Audi is the amusement ride of this group—sit down, buckle up, and hit the button. It's the easiest to drive of the trio, with benign handling and nearly telepathic steering. "The most enjoyable and secure car to drive fast. The rubber really bites in the corners, and the engine pumps power like a fire hose," said one test driver. Which brings us to the wonderful twin-turbocharged 30-valve V-6 engine. There's noticeably less turbo lag in the Audi than in the Subaru. The S4's engine enjoys a considerable displacement edge over the Subaru, so it feels more powerful off-boost. Plus, it runs less boost pressure (10.2 versus 14.2) and employs two blowers, which spool up faster than the Subie's single unit. Unfortunately, the six-speed's action is best described as rubbery. The gearbox routes power to a four-wheel-drive system that uses a Torsen limited-slip center differential to send power to the axle with the most grip, so the traction control only has to limit slip from side to side. Like all the systems here, it's transparent under normal driving conditions. View Photos JEFFREY G. RUSSELL | Car and Driver In addition to the shifter, the powerful brakes drew disparaging comments as well, despite their ability to stop the car from 70 mph in only 164 feet. "There's lots of pedal to push through before the brakes retard, and then the binders are way too touchy," mused one tester. Yet those two niggles did not alter our appreciation of this car's great versatility. Not only is it swift, it's also plush and very serene on the highway. It's easy to drive fast, yet as comfy as a La-Z-Boy. And no one can dispute the attractiveness and quality of the Audi's interior—its subdued hues and materials would fit nicely in a car costing twice as much. And as much as we liked the S4 model, it still came achingly close to being beaten by a car that is hugely less expensive. Perhaps it's not right to say that the S4 is 60 percent better than the WRX. Maybe the best way to put it is that in this test, our collective minds simply liked the S4 60 percent more. Car and Driver Specifications Specifications 2001 Audi S4 Vehicle Type: front-engine, all-wheel-drive, 5-passenger, 4-door sedan PRICE Base/As Tested: $40,782/$39,534 ENGINE twin-turbocharged and intercooled DOHC 30-valve V-6, iron block and aluminum heads, port fuel injection Displacement: 163 in3, 2671 cm3 Power: 250 hp @ 5800 rpm Torque: 258 lb-ft @ 1850 rpm TRANSMISSION 6-speed manual CHASSIS Suspension, F/R: multilink/multilimk Brakes, F/R: vented disc/vented disc Tires: Pirelli P6000 225/45YR-17 DIMENSIONS Wheelbase: 102.6 in Length: 176.7 in Width: 72.7 in Height: 54.9 in Curb Weight: 3652 lb C/D TEST RESULTS 60 mph: 5.5 sec 1/4-Mile: 14.2 sec @ 97 mph 100 mph: 15.0 sec 120 mph: 23.1 sec Rolling Start, 5–60 mph: 6.6 sec Top Gear, 30–50 mph: 8.7 sec Top Gear, 50–70 mph: 7.4 sec Top Speed (gov ltd): 142 mph Braking, 70–0 mph: 164 ft Roadholding, 300-ft Skidpad: 0.86 g C/D FUEL ECONOMY 950-Mile Trip: 21 mpg EPA FUEL ECONOMY City/Highway: 17/24 mpg -- 2001 BMW 330xi Vehicle Type: front-engine, all-wheel-drive, 5-passenger, 4-door sedan PRICE Base/As Tested: $36,385/$39,123 ENGINE DOHC 24-valve inline-6, aluminum block and head, port fuel injection Displacement: 182 in3, 2979 cm3 Power: 225 hp @ 5900 rpm Torque: 214 lb-ft @ 3500 rpm TRANSMISSION 5-speed manual CHASSIS Suspension, F/R: struts/multilink Brakes, F/R: vented disc/vented disc Tires: Continental ContiTouring Contact DIMENSIONS Wheelbase: 107.3 in Length: 176.0 in Width: 68.5 in Height: 56.5 in Curb Weight: 3525 lb C/D TEST RESULTS 60 mph: 5.7 sec 1/4-Mile: 14.4 sec @ 96 mph 100 mph: 15.5 sec 120 mph: 25.2 sec Rolling Start, 5–60 mph: 6.6 sec Top Gear, 30–50 mph: 8.3 sec Top Gear, 50–70 mph: 8.2 sec Top Speed (gov ltd): 129 mph Braking, 70–0 mph: 175 ft Roadholding, 300-ft Skidpad: 0.78 g C/D FUEL ECONOMY 950-Mile Trip: 24 mpg EPA FUEL ECONOMY City/Highway: 20/27 mpg -- 2002 Subaru Impreza WRX Vehicle Type: front-engine, all-wheel-drive, 5-passenger, 4-door sedan PRICE Base/As Tested: $24,520/$24,520 ENGINE turbocharged and intercooled flat-4, aluminum block and heads, port fuel injection Displacement: 122 in3, 1994 cm3 Power: 227 hp @ 6000 rpm Torque: 217 lb-ft @ 4000 rpm TRANSMISSION 5-speed manual CHASSIS Suspension, F/R: struts/struts Brakes, F/R: vented disc/disc Tires: Bridgestone Potenza RE92 205/55VR-16 DIMENSIONS Wheelbase: 99.4 in Length: 173.4 in Width: 68.1 in Height: 56.7 in Curb Weight: 3092 lb C/D TEST RESULTS 60 mph: 5.4 sec 1/4-Mile: 14.1 sec @ 96 mph 100 mph: 15.5 sec 120 mph: 25.2 sec Rolling Start, 5–60 mph: 6.6 sec Top Gear, 30–50 mph: 14.2 sec Top Gear, 50–70 mph: 10.0 sec Top Speed: 142 mph Braking, 70–0 mph: 181 ft Roadholding, 300-ft Skidpad: 0.82 g C/D FUEL ECONOMY 950-Mile Trip: 23 mpg EPA FUEL ECONOMY City/Highway: 20/27 mpg C/D TESTING EXPLAINED

USA Today
2 days ago
- USA Today
Want to buy an electric car or truck? What to know before tax credits expire Sept. 30
A brand new, out-of-the blue Sept. 30 deadline to buy an EV could be easy to miss, given all the quirky details packed into the nearly 900-page mega tax bill. But automakers aren't about to let that happen. An email sent by Telsa says: "Order soon to get your $7,500." "You can get $7,500 off a qualifying Tesla vehicle at delivery with the federal tax credit, which will now expire on September 30, 2025," the email stated. You must take delivery on or before Sept. 30 to be eligible. Sales of electric cars and trucks, including plug-in hybrids, could be scorching hot at the end of summer, according to industry analysts, as buyers hear more promotions about why they absolutely must lock in lucrative clean vehicle tax credits that expire under what has been called the 'one, big, beautiful bill.' A lucrative loophole on leasing EVs ends Sept. 30, too. A clean vehicle tax credit that's up to $4,000 for eligible used electric vehicles also expires Sept. 30. Don't kid yourself. Not every tax filer will qualify for the credit when buying a clean vehicle. The make and model and the MSRP matter. So does your income. The credits do not apply to every package offered on some electric car or truck or plug-in hybrid models. The availability of the credit for those who buy will depend on several factors, including the vehicle's MSRP, its final assembly location, the sourcing of the critical minerals and components in the battery, and your modified adjusted gross income. Included in the footnotes for the Tesla email: "Consult a tax professional. Not all buyers, vehicles or financing options will qualify. Terms and conditions apply." What vehicles qualify for the EV tax credit? Check out the details at to search for eligible vehicles. Independent websites, such as Edmunds, also list cars and trucks that are eligible for the federal EV tax credit. Some 2025 vehicles that could qualify for a $7,500 credit when you're buying the vehicle, according to the list, are: the Ford F-150 Lightning Flash Trim, as well as Lariat and XLT trims; the 2025 Jeep Wagoneer S; the 2025 Tesla Cybertruck dual motor, long range and single motor; various models of the 2025 Tesla Model 3, Model X and Model Y; the Cadillac Lyriq and Optic; the Chevy Blazer EV, the Chevy Equinox EV, and the Chevy Silverado EV. Among these models, though, you're limited to a vehicle with an MSRP of $80,000. Ask the dealer whether the specific car or truck you're buying qualifies. Not every version of a model listed on the website qualifies. For a consumer to qualify for a clean vehicle credit, the manufacturer suggested retail price can't exceed $80,000 for vans, sport utility vehicles and pickup trucks. It cannot exceed $55,000 for other vehicles. What are the income limits for an EV tax credit? Higher income households won't qualify for the credit when buying an EV. Your modified adjusted gross income may not exceed $300,000 for married couples filing jointly; $225,000 for heads of households; and $150,000 for all other filers. You can use your modified AGI from the year you take delivery of the vehicle or the year before, whichever is less, according to the Internal Revenue Service. If your modified AGI is below the threshold in one of the two years, you can claim the credit. The EV or plug-in hybrid must be bought for your own use, not for resale. You must use it primarily in the United States. More: Gamblers will pay more taxes in 2026 and beyond when Trump's 'big, beautiful bill' hits More: Taxes on Social Security benefits were not eliminated despite what you've heard Why many drivers are opting to lease EVs The bulk of EVs these days are leased — and for good reason when it comes to the complicated tax credit. A loophole in the tax credit, which was part of the Inflation Reduction Act of 2022, gave dealers an edge for promoting attractive leases for new EVs and plug-in hybrids, especially as many new clean vehicles were introduced. The driver cannot claim the clean vehicle tax credit in this case but can likely benefit from a better lease deal. It's one way many are finding lower monthly payments for higher priced vehicles, too. Leased electric vehicles are classified as "commercial vehicles," which means that they're eligible for the full federal clean vehicle credit without meeting strict battery and sourcing requirements. So, you might be able to lease an EV that wouldn't qualify for any credit at all if you bought it. In these cases, the tax credit belongs to the leasing company, often the automaker's captive finance arm. Some or all of that savings could be passed along to the buyer through a well-positioned lease deal. Stephanie Valdez Streaty, director of industry insights at Cox Automotive, told the Detroit Free Press that dealers are likely to feature attractive lease deals in the next two and a half months before the Sept. 30 deadline hits, which puts an end to the leasing loophole. She noted that only about 20 electric and plug-in hybrid models are eligible for the clean vehicle credit of up to $7,500 for consumers. Thanks to the EV leasing loophole, she explained, virtually any EV — regardless of price or country of origin — can qualify for the commercial clean vehicle tax credit, making it far more accessible than the consumer EV credit. The consumer who opts to lease the EV doesn't have to worry about any income limits affecting whether you qualify for the clean vehicle credit, she noted. And the leasing loophole gets around MSRP requirements or where batteries are produced or components are sourced. In April, 60% of all new EV transactions were lease deals, according to Cox Automotive data. Ivan Drury, director of insights at Edmunds, said almost all offers involving leasing are going to be the most favorable deals, given that they allow for more vehicles to benefit from tax breaks regardless of assembly location or battery sourcing requirements. Automakers and dealers already are having trouble moving EVs off the lot now, Drury said. "EVs went from some of the hottest products on the market back in 2022 to sitting on the lot for months on end, and it has been this way for nearly two years," Drury said. Selling EVs could get even tougher once the clean vehicle tax credit disappears. "Any reduction in incentives could lead to further issues once the tax credit deadline approaches, especially since many automakers have incentives stacked on top of the tax credit — with the tax credit doing most of the heavy lifting," Drury said. It is hard to say what happens beginning in October. Will automakers move so many EVs off lots by Sept. 30 that they no longer need to offer super-deep discounts? Or will brands with bloated EV inventories now still need to offer really good deals to unload metal in the fall? Drury said in some cases it might be possible to see current inventories reduced to a more manageable volume, especially as 2026 model year planning and forecasting will take into account reduced sales. "This could easily make the next few months one of the best and last times to score a deal on an EV," Drury said. Valdez Streaty, at Cox Automotive, expects solid growth in EV sales in the third quarter, as buyers act ahead of the Sept. 30 deadline for the expiring tax credit. Not surprisingly, she predicts that EV sales then will drop off in the fourth quarter, as the electric vehicle market adjusts to a new reality where buyers no longer receive federal tax breaks. Some states, like Colorado, currently offer tax breaks for EV purchases. But even Colorado's smaller tax break is set to be reduced as of Jan. 1, 2026. EV sales in the second quarter were down 6.3% year over year, according to a report issued July 14 by the Cox Automotive Kelley Blue Book team. Some of that decline is attributed to some buyers who rushed ahead to buy in the first quarter, as many anticipated that President Donald Trump would ultimately put end to EV tax credits for consumers. During the second quarter, consumers bought 310,839 new EVs in the United States, down from 331,853 in the same period in 2024, according to the well-known provider of information about the value of new and used cars. Total EV sales through the first half of 2025 set a record at 607,089, up 1.5% year-over-year, according to Cox Automotive Kelley Blue Book. Right now, buyers are looking at healthy inventories for EVs and strong sales incentives, according to experts. Ford Motor Co., for example, has extended a program called the "Ford Power Promise" that offers a free home charger and complimentary standard installation until Sept. 30. The offer applies to the purchase or lease of a new Ford F-150 Lightning, Mustang Mach-E or E-Transit Cargo Van. More: Ford's latest sale may be just the start in a summer of car-buying deals, experts say One doesn't have to look far to find some sort of deal on EVs. "Manufacturers and dealers are using this opportunity to create a sense of urgency to buy now while this (tax) incentive is still in place," Valdez Streaty said. Overall, sales incentives on EVs in the second quarter were more than 10% of the average transaction price. In June, average EV incentives from manufacturers reached an all-time high of 14.8% of average transaction prices, hitting nearly $8,500, according to Kelley Blue Book. These incentives are in addition to any available tax credit. In June, the average transaction price was $56,910 for a new EV, according to Kelley Blue Book. Todd Szott, whose family owns dealerships in Michigan, said more buyers are getting motivated to shop for EVs by the Sept. 30 deadline. The dealership is promoting several lease deals, including $329 a month for 24 months on a 2025 Dodge Charger R/T and $299 a month for 24 months for a 2024 Wrangler, 4-door Sport 4xe. The dealership is also promoting a $399 a month lease for 36 months on a 2025 Ford Mustang Mach-E. All lease deals are plus sales tax and state fees, and the first payment is due at signing. Almost all the dealership's customers lease electric vehicles or plug-in hybrid electric vehicles, Szott said. "The federal tax credit goes to the leasing company and is passed on to the customer in the form of a great lease deal," Szott said. He noted that more makes and models qualify for the federal tax credit through leasing because the qualifications to get the credit through leasing are less stringent. Many drivers also benefit from leasing, he said, because EV and PHEV technology will improve and change in three years, so leasing for about three years makes sense. He sells Ford, Chrysler, Jeep, Dodge, Ram and Toyota vehicles through Szott Auto Group in White Lake, Highland Township, Holly, Waterford and New Hudson. More: Ford's latest sale may be just the start in a summer of car-buying deals, experts say Some tips for car shopping now If you're tempted to buy or lease to beat the Sept. 30 deadline, experts say do your research and figure out your options now. If you plan to buy, talk to your bank or credit union and see what kind of interest rate on a car loan you'd qualify to get. Pushing anything to the last minute can cause processing errors, warns Mike Mader, Baker Tilly's dealership industry practice leader. And paperwork is key if you're buying an EV and expecting a tax credit. Remember, you cannot claim a federal income tax credit on your tax return if you lease the EV. Don't think things will just magically work out at tax time. Some taxpayers faced enormous headaches this year when dealing with the credit on their 2024 tax returns filed this year. The federal government notes that Clean Vehicle Tax Credits must be initiated and approved at the time of sale. Buyers should obtain a copy of the confirmation from the Internal Revenue Service that a 'time-of-sale' report was submitted successfully by the dealer. The IRS has an online portal for dealers to submit time of sale reports for EVs sold. Dealers must submit time-of-sale reports within a three-day period. The National Automobile Dealers Association told the Detroit Free Press that some earlier tax glitches have been worked out. 'NADA worked with the IRS to resolve the systemic issues with the portal earlier this year and those fixes have remained successful,' according to NADA spokesperson Amy Wright. 'Anecdotally, some dealers have reported an occasional, individual problem, but that should not deter consumers from purchasing an EV. There is no reason to believe there will be upcoming problems.' Many dealers, Wright said, offer the $7,500 credit at the time of purchase and that will remain unchanged until Sept. 30. The buyer can choose to take the credit upfront or claim it later on their tax return. You need the proper paperwork in either case. While a bit more than two months isn't a long lead time, the NADA said it was able to help secure a longer phaseout of the tax incentive through Sept. 30 instead of seeing the credit hit a dead stop even earlier. Contact personal finance columnist Susan Tompor: stompor@ Follow her on X @tompor.