Green Driver State Incentives in Kentucky

At this time, Kentucky does not offer many state incentives for drivers of alternative fuel vehicles (AFVs), electric cars (EVs), and hybrids. But through federal tax credits and auto insurance discounts for driving a fuel-efficient vehicle, you can still save plenty of money. Read on for further details.

Kentucky might enlist more eco-friendly incentives and related laws in the future. Two additional resources worth consulting include the Transportation Cabinet and the Alternative Fuels Data Center.

Kentucky Emissions Testing

Currently, the Kentucky Transportation Cabinet does not require an emissions test or safety inspection during first-time vehicle registration or car registration renewal. To learn more about the state's reasoning behind its dormant smog check policy, visit our KY Smog & Emission Checks page.

KY Tax Incentives for Green Vehicles

Currently, Kentucky does not offer many tax incentives for individual owners of fuel efficient cars. But it does provide a list of state incentives for businesses involved in the production and distribution of eco-friendly alternative fuels. Plus, the IRS grants federal tax credits for buying green. Continue reading for more on how Earth-conscious KY drivers can get a tax break.

If you need help navigating your state or federal taxes to take advantage of applicable incentives, consider contacting the IRS Taxpayer Assistance Center, a tax professional, or the Kentucky Department of Revenue.

Federal Tax Credits

Owning a fuel efficient car might qualify you for federal tax credits thanks to the IRS. Eligible green vehicles include:

  • Electric cars.
  • Hybrids.
  • Plug-in hybrids.
  • Diesels.
  • Alternative fuel vehicles (AFVs).

For specifics, consult

Propane Excise Tax Exemption

Using propane to operate a vehicle on public highways (within the state and otherwise) spares you the expense of the state excise tax. To qualify for the Kentucky propane excise tax exemption, vehicles must either:

For more on the excise tax exemption for using liquefied petroleum gas, refer to the Kentucky Revised Statutes 234.321.

Auto Insurance Discounts for Eco-Friendly Driving and Green Vehicles

Numerous Kentucky auto insurance companies reward green driving habits with insurance rate discounts. Whether you drive a fuel-efficient vehicle or keep your miles to a minimum, explore eco-friendly driver discounts such as:

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

Of course, auto insurance discounts vary by provider and circumstances. For example, you might receive a 10% discount on car insurance for owning or leasing a hybrid car, while maintaining low mileage can earn you up to a 30% auto insurance discount.

Discuss these discounts with your current Kentucky auto insurance carrier, and if it doesn't cut you the break you deserve, compare auto insurance rates online and find one that does.

KY Rideshare Programs

Even though the State doesn't offer numerous incentives to green drivers, many of the state's largest urban districts—Lexington, Louisville, northern Kentucky—ambitiously promote local rideshare programs. Look online for opportunities to reduce traffic and save money with your fellow Kentuckians.

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