The end of the year is coming fast for buyers of hybrid cars, as tax incentives run out when the new year arrives, according to the Wall Street Journal (subscription required)

The tax credit for the Honda Civic hybrid ends at the end of the year, just like it did about a year ago for Toyota Motor Corp.'s Prius, a strong-selling hybrid that gets about 46 miles per gallon. The federal government is phasing out the same incentives for Honda Motor Co.'s Civic hybrid, which gets 42 miles a gallon.

According to the Journal, hybrid tax incentives start to go away when a car maker sells its 60,000th alternative-fuel vehicle, a level Toyota reached in mid-2006 and Honda hit in the third quarter of 2007. The amount of the tax credit is first reduced by 50% before disappearing altogether over several months. Honda's $525 tax credit will be phased out by Dec. 31, according to the Internal Revenue Service. The Civic credit had been as high as $2,100 before the phase-out began in January 2008.

The first problem with the Prius is that it isn't just a car. When the engineers at Toyota began working on a hybrid, their course was probably very clear: they wanted to make a relatively inexpensive, moderately attractive piece of machinery that would go reasonably fast while sipping gas as carefully as Joe Lieberman's poison taster. Maybe they imagined that their car would gain a little cachet in the crunchy granola set, but their primary goal was to create affordable, moderately green transportation. They succeeded, of course, and produced a fine little car that does everything they wanted.

Then the marketing people got their greasy little hands on the Prius and everything went to hell.

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If your primary interest is in saving gasoline, the Prius is an outstanding bet. The 2008 model gets 48 mpg in the city and 45 mpg on the highway, making it the most fuel efficient car available in the US, according the EPA. Unfortunately, however, all of this fuel efficiency comes at a considerable cost: the price of a current Prius hovers somewhere in the $25,000 range, pushing it out of the range of many consumers. By comparison, a used 1990's Geo Metro gets 38 mpg in the city and 45 mpg on the highway, yet starts in the $2,000 range. For a fully refurbished model, purchasers can expect to pay $4,000-$5,000.

Of course, a used Geo just isn't all that sexy, which brings us to the heart of the Prius matter. While Toyota's wonder machine is great for saving gas, it's even better for improving one's social position. After all, there aren't a lot of cars that convey its mix of environmental awareness, sexy technology and trendy thriftiness. Admittedly, with the high cost of gas, a Prius will become a profitable purchase far earlier than comparable models, but that assumes that you are among the few people who are both willing and able to shell out $25,000 for a new car this year.

When they were first introduced, the only hybrid cars on the market were Toyotas and Hondas -- small, practical cars that were admittedly a little funny-looking. These vehicles were much more about economy than style. Luxury automakers were slow to jump on the hybrid bandwagon, as their target customers have not generally been too concerned with the cost of fuel.

Times have changed, though, and rising fuel costs are affecting even the wealthiest sectors of the population. Environmental concerns are growing, too, and hybrid cars are in very high demand. In June 2009, Mercedes will begin selling its first hybrid -- a large car that balances fuel economy with sexiness.

At 30 miles per gallon, the new model will approximately double the mileage of the non-hybrid luxury S-class sedan, but it's still no 60mpg Prius. Mercedes execs argue that this large car is more practical for their customers, with plenty of space to pack for vacations. There's no official price tag just yet, but Mercedes Marketing Director Klaus Maier estimates a premium of less than €10,000, or $14,000. That would put the total price in the neighborhood of $100,000 - $160,000, depending on options.