Ford Escape SUV Qualifies for $2,000 Tax Deduction

Ford Motor Company’s Escape sport-utility vehicle is the first hybrid built by a U.S. automaker to qualify for a $2,000 tax deduction that encourages sales of low-pollution vehicles. Buyers of new 2005 gasoline-electric Escape SUVs can claim the income tax deduction for the year in which the vehicle is first used, according to the Internal Revenue Service, which expanded the deduction in 2002 to hybrids from electric vehicles.

Ford set a starting price of $26,380 for the gasoline-electric Escape and says that the hybrids would cost at least $3,300, or 15%, more than comparable gasoline-only versions of the SUV. The IRS said the tax deduction for the Escape was set after Ford had documented the additional costs related to the hybrid technology. The deduction is scheduled to drop to $500 in 2006, and end a year later.