(MONEY Magazine) – Q. High gas prices have me thinking about a fuel-efficient hybrid model. There's a tax break available too, right? Saving on fuel and taxes sounds like a good deal.
A. Automakers and oil companies remind us that today's gas costs less than bottled water. Since gasoline tastes so much worse, that's not much consolation. But you may take comfort in the knowledge that, yes, Congress recently extended a one-time $2,000 deduction for buyers of gas-electric hybrids in 2004 and 2005. (The deduction will end following a $500 break for 2006.) The break applies to a growing roster of models, including the Ford Escape SUV; a Honda Accord hybrid on sale this month (see "Car News" at right); and, around April, the hybrid Toyota Highlander and Lexus RX 400h.
Still, it's a drop in the tank compared with the largesse extended to trucks. Until this year, Congress let small business owners deduct the entire cost of the biggest, thirstiest SUVs or pickups—up to $100,000—as long as they swore it was for critical Hummer-type business (commando missions to the dry cleaner?). Pending legislation will barely tighten the loophole, allowing first-year deductions exceeding $60,000. The piddling tax break for hybrids kind of shows the priority our leaders place on conservation and energy independence.
Q. Earlier this year you rated the Infiniti G35 as the best sports sedan. Lately you've been raving about the Acura TL. Which is it?
A. You've picked up on the split personality of the luxury-sports-sedan segment—and the split personality of auto scribes, who sometimes need a reminder that not everyone wears a racing helmet to work. The G35 is my favorite because it goes head to head with the benchmark BMW 3 Series for thousands less. Both offer the performance advantages of rear-wheel drive, but many luxury buyers couldn't care less which wheels drive their car. They want a posh feel, impeccable interiors and the most technology and amenities for the dollar. The Acura TL is a dream machine by those standards, even if its front-drive layout gives up some handling. It boasts a richer cabin than the Infiniti, more room than the BMW and more standard features than either—all for a near-loaded price of $33,470. And its formidable 270-hp V-6 outpaces the G35 and BMW, posting a 5.9-second 0-to-60-mph time. But I've straddled the yellow line on your question, so here's the answer: For my money, the $32,990 Infiniti is still best, but yours might say otherwise once you decide where your luxury head is—racing helmet or designer fedora?