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What are the benefits of an eco-friendly car?

When choosing a new car, there are a host of benefits on offer if you opt for an eco-friendly set of wheels.

Cars that produce less than 100 grams per kilometre (g/km) of CO2 are exempt from UK Vehicle Excise Duty road tax; these cars fall into VED Band A.

This means that by opting for one of the most environmentally friendly vehicles currently available, you can make some hefty savings - as you've essentially got a tax-free car.

In effect, cars that avoid road tax are among the most affordable new cars to buy and run on the road.

Equally, as many green cars achieve excellent fuel economy, this can help boost your savings even further.

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Green car insurance

As well as making savings on annual fuel and road tax costs, you can also benefit from cheaper car insurance deals, as some insurers will offer lower green car insurance premiums to environmentally friendly car owners.

With MoneySupermarket, for example, you could benefit from a 5% insurance discount by purchasing green car insurance policy. This deal is available through certain insurance providers who are keen to encourage the use of environmental vehicles.

While this may not sound like a huge amount, it can make a difference - especially when added to the savings you're making on fuel and road tax.
Further, some green car insurance providers will also offer to offset the pollution caused by your car with a scheme such as tree planting or donating to charity.

Congestion charge savings

On top of the savings listed above, some tax-free cars may also be exempt from the London Congestion Charge.

Cars which emit 100g/KM or less of CO2 and that meet the Euro 5 standard for air quality qualify for a 100% discount.

You can check the CO2 emissions of your car on the V5C registration document; any car registered as new with the DVLA on or after 1 January 2011 is deemed to meet the Euro 5 standard.

What are the best tax-free cars available?

Here we take an unbiased look at some of the most high-profile tax-free cars currently available, as reviewed by WhatCar? and AutoTrader; this should help you choose a good road-tax free car.

WhatCar? currently has more than 230 cars that sit in road tax (VED) band A; here's a look at some of the top picks.

Nissan Leaf

If you're looking for an electric model, WhatCar? Recommends the Nissan Leaf as the “best on sale.”

It may have a limited range (Nissan claims you can do 100 miles on a single charge, but WhatCar? Says the maximum is nearer to 80 miles); that said, it's got strong performance and excellent refinement.

It's fun and comfortable to drive, has enough room to fit the family in, and while it's pretty pricey at the outset, it's then very cheap to run.
This model may best suit a low-mileage driver with strictly regimented journeys.

As there are no tailpipe emissions, the car is exempt from road tax and the London Congestion Charge.

Take advantage of the MoneySupermarket.com electric car insurance guide for more specific look at policies which will cover this type of vehicle.

Ford Fiesta Econetic

WhatCar? picks out this car for being frugal with a very economical 1.6 litre turbo-diesel engine.

AutoTrader describes this model as being one of Britain's best-loved cars, with very low emissions, and plenty of style.

Access to the rear is better in the five-door body, but the vehicle does have limited knee-room for adults.

That said, it ranks highly for economy and emissions and is certainly a sound choice.

Volkswagen Golf 1.6 TFI Bluemotion

This car was voted Green Small Family Car of the Year 2011 by WhatCar? Who commended it for being as desirably and classy as any Golf”, and very fuel-efficient.

The engine is refined and its CO2 emissions are so low that the Bluemotion is exempt from road tax.

On the downside, the fifth gear is a little long, forcing you down to fourth when motorway driving.

Nonetheless, WhatCar? Says the car is classy, practical and great to drive.

Toyota IQ

The Toyota iQ is picked out by AutoTrader for being a freshly-styled and well-packaged city car that is very good fun to drive.

On the plus side it benefits from modern styling, and having quality interior materials and an impressive level of kit.

On the downside, it offers less space than its rivals and the engine lacks refinement; the car also has a tendency to pitch and dive.
That said, the car is exceptionally different, stylish and very cool.

And, after paying the relatively high purchase price, the Toyota iQ should be an extremely cheap and green car to run.

For a car that's less than three metres long, its style, drive and economy is pretty impressive.

Mini Cooper 1.6D

For drivers who want to have fun, but still get decent mile per gallon, WhatCar? Picks out the Mini Cooper 1.6D, with its smooth diesel engine.

It's an exhilarating drive for the eco-minded driver and returns more than 70 miles per gallon on average, while emitting just 104g/km CO2.

It is quite a noisy drive, and not cheap to buy, but it will hold its value well in the long run.

The boot is tiny but the car will fit four people - and oozes style and desirability.

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