Rebated or Taxed: It's all in what you buy

All cars are not created equally, which is why the federal government introduced initiatives back in 2007 to encourage earth-friendly car purchases; the ecoAUTO rebate program for vehicles that are fuel efficient, and the Excise Tax (Green Levy) on Fuel INefficient Vehicles.

The Rebated

Let's start with the good news, the rebates. (Update: The ecoAUTO rebate program is no longer available effective December 31st, 2008.)

According to Transport Canada the following 2008 model year cars are eligible for the rebate*. The list is comprised of new cars that get 6.5 L/100km or better, or new light trucks that gets 8.3 L/100km or better. The list features hybrid electric and highly energy efficient vehicles. In addition, new flexible-fuel vehicles with combined fuel consumption E85 ratings of 13.0 L/100km or less will be eligible.

• Chevrolet HHR FWD-Rebate: $1000
• Chevrolet HHR Panel FWD-Rebate: $1000
• Chevrolet Impala FFV-Rebate: $1000
• Chrysler Sebring Sedan FFV-Rebate: $1000
• Dodge Avenger FFV-Rebate: $1000
• Ford Escape Hybrid FWD-Rebate: $2000
• Ford Escape Hybrid AWD-Rebate: $2000
• Honda Civic (2-door) -Rebate: $1000
• Honda Civic (4-door) -Rebate: $1000
• Honda Civic Hybrid-Rebate: $2000
• Honda Fit-Rebate: $1000
• Jeep Compass 2x4-Rebate: $1000
• Jeep Compass 4x4-Rebate: $1000
• Jeep Patriot 2x4-Rebate: $1000
• Jeep Patriot 4x4-Rebate: $1000
• Lexus RX 400H 4WD-Rebate: $1000
• Mini Cooper Clubman-Rebate: $1000
• Mini Cooper--Rebate: $1000
• Nissan Altima Hybrid-Rebate: $1500
• Nissan Rogue FWD-Rebate: $1000
• Saturn VUE Hybrid-Rebate: $2000
• Smart ForTwo (Coupe) -Rebate: $2000
• Smart ForTwo (Convertible) -Rebate: $2000
• Toyota Camry Hybrid-Rebate: $1500
• Toyota Corolla-Rebate: $1000
• Toyota Highlander Hybrid 4x4-Rebate: $1500
• Toyota Prius-Rebate: $2000
• Toyota Yaris-Rebate: $1000

Thinking of buying a rebate-eligible vehicle? Before you do, don't forget to compare auto insurance quotes instantly online from competing insurers. (Update: The ecoAUTO rebate program is no longer available effective December 31st, 2008.)

The Taxed

Now for the bad news, the excise tax (aka the Green Levy.) If you're looking to buy a new vehicle anytime soon, make sure you look into whether or not it is subject to the Green Levy. The Green Levy is a tax on certain new automobiles which are determined to be fuel INefficient.

According to the Canada Revenue Agency, the excise tax is determined on the basis of the vehicle's weighted average fuel consumption. The weighted average is calculated by combining 55% of the city fuel consumption rating with 45% of the highway fuel consumption rating.

Vehicles that have a weighted average fuel consumption of 13 or more litres per 100 km will be subject to the tax at the following rates:

• At least 13 but less than 14 litres per 100 km: $1,000
• At last 14, but less than 15 litres per 100 km: $2,000
• At least 15 but less than 16 litres per 100 km: $3,000
• 16 or more litres per 100 km: $4,000

So what vehicles are subject to the tax? The Canada Revenue Agency provides a list of 2007 model year vehicles, of which we've selected a few to highlight the range in vehicles that the Green Levy affects, and the tax applied*:

• Audi S4, Manual-Levy: $1,000
• Audi S4 Avant, Manual-Levy: $1,000
• BMW X5 4.8i-Levy: $1,000
• BMW M5, Manual with automatic clutch-Levy: $3,000
• Buick Rainier AWD, 5.3 L-Levy: $1,000
• Cadillac Escalade AWD-Levy: $2,000
• Chevrolet Suburban, 6L-Levy: $2,000
• Chevrolet Trailblazer AWD-Levy: $3,000
• Chrysler 300C SRT8-Levy: $1,000
• Chrysler Aspen4x4 (MDS)-Levy: $2,000
• Dodge Charger SRT8-Levy: $1,000
• Dodge Durango 4x4 FFV-Levy: $2,000
• Ford Mustang, 5.4 L-Levy: $1,000
• Ford Explorer 4x4, 8 cylinder-Levy: $2,000
• GMC Envoy4x4, 5.3 L-Levy: $1,000
• GMC Yukon 4x4 FFV-Levy: $1,000
• Hummer H3 4x4, Electronic automatic-Levy: $1,000
• Infiniti FX45 AWD-Levy: $2,000
• Jeep Commander 4x4-Levy: $1,000
• Jeep Wrangler Unlimited 4x4-Levy: $1,000
• Land Rover Range Rover 4x4-Levy: $2,000
• Lexus GX 470-Levy: $1,000
• Lexus LX 470-Levy: $3,000
• Mercedes-Benz ML500-Levy: $2,000
• Mercedes-Benz R500-Levy: $2,000
• Nissan Armada 4x4-Levy: $3,000
• Nissan Pathfinder 4x4-Levy: $1,000
• Saab 9-7X AWD, 5.3 L-Levy: $1,000
• Toyota 4Runner 4x4, 4.7L-Levy: $1,000
• Toyota Sequoia 4x4-Levy: $2,000
• Volkswagen Touareg, 3.6 L-Levy: $1,000
• Volvo SC90 V8 AWD-Levy: $1,000

If your dream car is subject to the Green Levy, make sure you save on your auto insurance by shopping around. Get and compare auto insurance quotes instantly online from competing insurers to make sure you get the best price possible for the auto insurance coverage you need.

Shopping for a new car? Shop for your insurance too

In the same way some cars are treated differently when it comes to the rebate or tax program, auto insurance premiums will differ as well. Not because they're eligible for a rebate or are subject to a tax, but because each insurer's car insurance rates are so unique to them that it's safe to say that no two are alike. Coverage from one company to the next can vary by hundreds, if not thousands of dollars. The only way to make sure you are getting the best price for your auto insurance policy is to shop and compare. So if you plan on buying a new car, remember that with www.kanetix.ca's online quote comparison service you get quotes from competing insurers instantly online - in real-time, to see if there is an opportunity to save on your auto insurance premiums.

Compare car insurance quotes today.

Looking for more on hybrid car trends, fuel efficiency, and auto insurance rates?

Over the years, Kanetix® has compiled a series of articles and news bytes that you might find of interest:

• Hot hybrids: The 10 most popular hybrids
• Top 10 most popular hybrids in 2008
• Hybrid cars in Canada: Will going green save you money?
• Hybrid car popularity soars, but will your auto insurance?
• Fact, fiction, rumour or reality? The scoop on hybrids.
• Hybrid auto insurance rates 24 per cent lower than last year
• Autos that save you money: In gas and in your auto insurance premiums.
• Gas prices driving you to walk? You don't have to park the car yet.
• Gas prices affecting your choice of vehicle for you next purchase?
• Top 10 most popular hybrids quoted online, in the first half of 2007, for auto insurance through Kanetix.
• Hybrid popularity soars. Hybrid auto insurance quotes up 77 per cent.
• Top 10 most popular hybrids quoted online, in Winter/Spring 2006, for auto insurance through Kanetix.

* For the full list and details of the ecoAUTO rebate eligible vehicles and the list of vehicles subject to the Green Levy visit the websites for the Canada Revenue Agency and Transport Canada. These lists may not be definitive, and are solely for reference purposes only.