Alternate fuel vehicles currently arriving in the market offer much better driving performance compared to their predecessors in the 1990s, and their market penetration is higher than before. However, most people still do not consider these alternate fuel vehicles as a real alternative to traditional gasoline cars. Incentives offered to promote adoption have achieved varied results. The stated vehicle transaction decisions of 3154 survey respondents located throughout the state of California indicate that, while the effectiveness of policy incentives like tax credits and rebates is more universal, the effect of High Occupancy Vehicle (HOV) lane permit or the free parking benefit depends on the likelihood of the household being able to use the benefits. Also, familiarity with a new fuel technology is related to the preference for CNG, electric battery or hydrogen fuel cell vehicles. This persistence in choice behavior can be attributed to heterogeneity among vehicle purchasers or as a sign

of positive experience. Experience can reduce skepticism about alternate fuel vehicles and induce future adoption. Accounting for the number of years of ownership of alternate fuel vehicles, the results show that current ownership has a positive effect on the probability of repurchase of the same or newer technology. In addition, estimates of the willingness to pay for alternate fuel vehicles with different body types indicate that consumers who may switch from gasoline cars are likely to choose one that offers them comparable attributes and serves a similar purpose as the vehicle they are substituting. The discrete choice model is based on responses to customized stated preference questions involving hypothetical vehicle options. The results are potentially useful to energy agencies interested in promoting alternative fuel vehicles and to manufactures faced with the challenge of designing and marketing these vehicles.