Save with an eco-friendly car

There are lots of benefits to choosing an environmentally friendly car – and not all of them are just for the good of the planet. Opting for a “green” car can also allow you to make some hefty savings on road tax, fuel and insurance.

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Road tax

In his 2013 Budget statement, George Osborne, the Chancellor of the Exchequer, announced changes to the rates of car tax. These changes apply to tax discs taken out from April 1, 2013. As before, cars registered after March 1, 2001 will fall into one of 13 car tax bands, from A to M. The bands are based on how many grams of carbon dioxide (CO2) a car emits per kilometre driven, with the annual tax set at up to £490. The good news for drivers of cars that produce less than 100 grams per kilometre (g/km) of CO2 is that they fall into band A and are therefore exempt from UK Vehicle Excise Duty road tax altogether. That’s a big advantage when you consider that drivers of cars that emit 225 grams of CO2 per kilometre have to shell out almost £500 a year. The savings can be even greater if you live or work in London, as cars that emit 100g/KM or less of CO2 and that meet the Euro 5 standard for air quality are also exempt from the London Congestion Charge. Any car registered as new with the DVLA on or after January 1, 2011 should meet the Euro 5 air quality standard.

Fuel costs

Whether you have a petrol or a diesel vehicle, filling up at the petrol station is a huge regular outlay. An eco-friendly car that uses less fuel can therefore have a big impact on how much you pay to stay on the road. Figures from the Energy Saving Trust indicate that choosing the most fuel-efficient car in a particular category could save you four months’ fuel a year. That’s a £400 annual saving if you spend £100 a month on fuel.

Car insurance

Some insurers offer cheaper “green” car insurance to environmentally friendly car owners. You could, for example, benefit from a 5% insurance discount if you purchase a green car insurance policy from a company that is keen to encourage the use of environmental vehicles. Some insurance providers will also offer to offset the pollution caused by your car with a scheme such as tree planting or donating to charity. You can find out more, and secure the best deal when you renew your policy, by shopping around at our independent price comparison service.

The best tax-free cars

Cars that avoid road tax are among the most affordable new cars to buy and run on the road, and the choice of cars that fall into this category has shot up over recent years. Here are three of the best.

Ford Fiesta 1.0T 100 Ecoboost Zetec

ford fiesta ecoboost zetec
This supermini, which has CO2 emission of 99 grams per kilometre, is motoring specialist WhatCar’s pick of the popular Ford Fiesta range. WhatCar? said: “The Fiesta is a sensational supermini. It’s well specified, competitively priced and this 99bhp three-cylinder model delivers plenty of performance.” The price is around £13,000 to £14,000.

Audi A3 hatchback 1.6 TDI 105 Sport

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This relatively powerful, diesel engine manages to keep its emissions below the 100 gram per kilometre mark, therefore making it exempt from road tax. WhatCar? awarded it five stars and said: “This entry-level diesel is smooth and flexible, and surprisingly cheap to run as a company car thanks to sub-100g/km CO2 emissions.” It costs about £20,000 to £21,000 new.

Nissan Leaf Hatchback

nissan leaf hatchback
The electric Nissan Leaf costs very little to run and is “easy, fun and comfortable to drive”, according to What Car? It is also roomy enough to be used as a family car. The downside, however, is that it needs recharging regularly. “Just make sure you can live with the limited - and not always predicable - range,” added WhatCar? The price - between £26,000 and £30,500 - may also prove off-putting for some!

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