Green Driver State Incentives in Vermont

Vermont offers a few green driver incentives to entice locals to adopt more eco-friendly driving habits. These include emissions test exemptions for electric cars and neighborhood electric vehicles, fuel-efficient auto insurance discounts, federal tax credits for alternative fuel vehicles, and more.

These perks and related green vehicle laws are ever-evolving—especially as VT increases its focus on environmental issues. For example, according to the Department of Environmental Conservation Strategic Plan, Vermont has set goals to:

• Play a role in promoting the formation of an electric vehicle (EV) corridor in the Northeast. This includes supporting the deployment of zero emission vehicles (ZEVs) and associate infrastructure.
• Propose legislation to offer incentives to make it easier for locals to buy EVs.
• Increase the number of VT-registered electric vehicles.

Reference this page in addition to consulting your local Department of Motor Vehicles (DMV) branch and the government's Alternative Fuels Data Center for the latest.

Vermont Emissions Test Exemptions for Electric Vehicles

Because hybrids have the ability to run on gasoline, VT does not exempt them, or any other alternative fuel vehicle (AFV) capable of operating on gas, from emissions testing. Vermont requires all gasoline-powered vehicles (model-year 16 model years and newer) and diesel-powered vehicles (model-year 16 model years and newer and 8,500 lbs. and under) to be emissions tested as part of the annual safety inspection.

Note that all vehicles must undergo an annual safety inspection as a condition of first-time Vermont vehicle registration and registration renewal—regardless of whether your vehicle is emissions-test exempt. For more info, check out our page on inspections and smog checks or the State's page on vehicle emission control requirements.

If your vehicle requires an emissions or safety inspection, find the nearest testing center with the widget at the bottom of this page.

Reduced Vehicle Registration Fees for Electric-Powered Vehicles

Vermont registration fees for electric-powered vehicles are nearly half the cost of registering a gas- or diesel-powered vehicle. Specifically, these fees cost:

Registration fees for 1 year:

• Electric-powered vehicle: $89.
• Other than gas/diesel auto: $157.25.

Registration fees for 2 years:

• Electric-powered vehicle: $163.
• Other than gas/diesel auto: $287.25.

Auto Insurance Discounts for Eco-Friendly Driving and Green Vehicles

Certain Vermont auto insurance companies give green drivers a break on auto insurance rates. These auto insurance discounts are just another perk of having eco-friendly driving habits and/or a fuel-efficient car:

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

Note that 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.

Find out if your current VT auto insurance carrier rewards eco-friendly driving. If not find one that does while comparing auto insurance rates online.

State Tax and Federal Tax Credits

Vermont Tax Credits for Alternative Fuel/Advanced Vehicle Research and Development

Vermont offers qualifying high-tech businesses a variety of tax breaks for the design, development, or manufacture of one of the following:

• Energy technology of sources other than fossil fuels.
• Eectric vehicles*, alternative fuel vehicles, or hybrids**.

*EVs must draw propulsion energy only from an on-board, electrical-energy source.

**Hybrid vehicles must draw propulsion energy from two sources: consumable fuel and a rechargeable energy storage system.

Some of these tax credits include payroll tax credits and export tax incentives. For full details, consult the AFDC and Vermont Statutes (Title 32, Chapter 151, Sub-Chapter 11E).

Federal Tax Credits for Fuel-Efficient Vehicle Owners

In addition to the Vermont-specific tax incentives offered by the State, there are a number of federal tax credits for fuel-efficient vehicle owners. You might qualify for tax credits offered by the federal government for buying:

• Electric cars (EV).
• Hybrids.
• Plug-in hybrids (PHEV).
• Diesels.
• Alternative fuel vehicles (AFV).

Learn more about federal tax breaks at fueleconomy.gov. You can also talk with your preferred tax preparer as well as your local Taxpayer Assistance Center.

Find a Nearby Vermont Emissions Testing Station

Locate the closest VT smog and emissions testing station with the widget below: