Green Driver State Incentives in California

California leads the nation in encouraging drivers to go green with a wealth of eco-friendly driver incentives. Whether you drive an electric car, hybrid, or alternative fuel vehicle, or if you're simply in the market to buy a fuel-efficient vehicle, read on for more on how to save time and money as an Earth-conscious Californian.

Keep in mind that these green driver incentives and related laws are ever-evolving. Three additional resources worth consulting include your local CA Department of Motor Vehicles office, the Alternative Fuels Data Center , and

High Occupancy Vehicle (HOV) Exemption for CA Clean Air Vehicles

CA exempts drivers of low- and zero-emission vehicles from the minimum passengers required for using HOV lanes. That means, if your vehicle meets specified emissions standards, you can save time by driving in either of these carpool or diamond lanes as a sole occupant. To do so, you must first obtain a Clean Air Vehicle (CAV) decal from the DMV. Keep reading for more on which decal you qualify for and how to apply.

Types of CAV Decals

The CA DMV issues two types of CAV decals: orange, white, and green. To determine which sticker to apply for, first determine whether your vehicle qualifies.

Orange and Purple CAV decals:

  • Vehicles that meet CA's ultra-low emission vehicles (SULEV) standard for exhaust emissions AND the federal low-emission vehicle (ILEV) evaporative emission standard.
  •  Vehicles that meet the state’s enhanced advanced technology partial zero-emission (enhanced AT PZEV) vehicles.
  • Vehicles that qualify as transitional zero emission vehicle (TZEV) standard

Green CAV Decals:

If your vehicle meets the requirements of either of the following, you'll receive a green CAV decal:

  • California's Enhanced Advanced Technology Partial Zero Emission Vehicle (Enhanced AR PZEV).
  • Transitional Zero-Emission Vehicle (TZEV).

The California Air Resource Board adds all qualifying vehicles to its website so applicants can see the latest number of available decals.

How to Apply for Original CAV Decals or Transfer Existing Decals to a New Owner

Follow the steps below if you need to obtain original CAV decals or transfer the name associated with existing decals to a new owner. Know that transferring vehicle ownership requires transferring the name tied to your decals.

  1. Download and complete the Application for Clean Air Vehicle Decals.
  2. Determine if you owe fees:
    1. Original decals: $22 fee.
    2. Transferring the CAV into the new owners name is free (as long as the required CAV decals are presently affixed to the vehicle). Replacement decals will cost you.
  3. Mail the application and fees (if applicable) to: Department of Motor Vehicles
    Special Processing Unit
    MS D238
    P.O. Box 997601
    Sacramento, CA 95899

Once approved, you'll receive your own new CA decal ID card. For full details, refer to the DMV's section on Clean Air Vehicle decals.

High Occupancy Toll (HOT) Exemption for CA Clean Air Vehicles

Drivers of vehicles with the above-mentioned valid CAV decal can also use high occupancy (HOT) toll roads for free. Of course, the fee exemption does not apply when the federal government prohibits it. Learn more on how to apply in the section above.

Free Parking for Green Vehicles in California

The following cities offer free parking for qualified fuel-efficient vehicles:


EVs that are 100% electric (as designated by the DMV) and certified by the City's Emerging Small Business Development get free parking and recharging in designated parking spaces as part of the Electric Vehicle Parking Program. Apply online or submit your enrollment application by mail.

Santa Monica

Vehicles with Clean Air Vehicle decals (white or green, and ZEV) get free metered parking for the maximum amount of time allotted per meter; staying beyond that could land you a ticket.

Cash Incentive to Voluntarily Retire High-Polluting Vehicles

Through California's Consumer Assistance Program (CAP), you can receive either $1,000 or $1.500 (low-income applicants) for retiring your passenger vehicle as long as:

  • You are the registered owner.
  • The vehicle is titled in your name.

Residents often retire their vehicles because they failed their most recent smog check inspection, their vehicle is inoperable, or their registration has lapsed significantly. Refer to the full list of eligibility requirements to determine if you qualify. Then download the Consumer Assistance Program Application.

Because California values the environment, it enlists a financial assistance program to help residents repair gross-polluting vehicles. Through the afore-mentioned Consumer Assistance Program, you can receive financial help toward the emissions-related repair of a vehicle that can't pass its biennial smog check.

Refer to the CAP FAQs and the Repair Assistance FAQs to learn more. Then download, complete, and submit the Consumer Assistance Program Application to the Bureau of Automotive Repair.

Auto Insurance Discounts for Eco-Friendly Driving and Green Vehicles

To reward customers for adopting greener driving habits (including buying a fuel-efficient vehicle), some California auto insurance providers offer insurance discounts to eco-friendly drivers. Consult your car insurance company about potential green vehicle discounts such as:

  • Hybrid auto discounts.
  • Alternative fuel vehicle (AFV).
  • Economy car discounts.
  • Low-mileage discounts.
  • Pay as you drive discounts.

Not all auto insurance providers offer the same discounts. You have to shop around and compare. What's more, circumstances can also dictate how much you'll save.

If your current California auto insurance carrier doesn't reward eco-friendly driving, find one that does. Compare auto insurance rates online and save some green for going green.

Alternative and Renewable Fuel and AFV Financial Incentives

California's Alternative and Renewable Fuel and Vehicle Technology Program (AB 118) provides grants (and other funding) for developing and integrating alternative and renewable fuels and advanced technologies in the transportation sector. Specifically, the Program give a financial boost to:

  • Consumers.
  • Businesses.
  • Vehicle and technology manufacturers.
  • Workforce training partners.
  • Fleet owners.
  • Academic institutions.

For the purpose of this funding, alternative fuels and alternative fuel vehicles include:

Alternative fuels—electricity, natural gas, biomethane, propane, hydrogen, ethanol, renewable diesel, and biodiesel fuels.

Alternative fuel vehicles—any dedicated, flexible-fuel, or dual-fuel vehicle designed to run on at least one alternate fuel. This includes sedans, SUVs, pickups, and vans, medium and heavy-duty buses and trucks.

Find out how to access funding by checking out the Program's current funding opportunities. You can also keep up with the latest by subscribing to the Alternative Fuels ListServ to get word on funding opportunities as they develop.

You can also see the types of projects previously funded in the Investment Portfolio, or refer to the AFV programs to learn more.

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