Better fuel efficiency and lower road tax means motorists could save up to £300 a year by choosing greener cars, according to research released today.

The study from price comparison website uSwitch.com assessed the running costs of the cars with the lowest emissions from six vehicle categories, as identified by the Department for Transport, and compared them with similar conventional cars from the same manufacturers.

The research found that drivers of the greener cars – which included the Toyota Prius, the diesel Renault Laguna Hatch and the Polo super-mini – would save an average of £165 each year on fuel and up to £125 on road tax, while also cutting their carbon emissions by 17 per cent when compared to their counterparts in conventional vehicles. Over the course of five years it was estimated the owner would save £1092.

Ashton Berkhauer, insurance expert at uSwitch.com, said that while a car's green credentials were emerging as a powerful marketing tactic for manufacturers customers were also increasingly attracted to the cost savings associated with more fuel efficient vehicles. "It is not simply a case of motorists blindly jumping on to the green bandwagon," he said. "With fuel prices soaring to a record high, motorists are increasingly becoming attracted to these fuel-efficient, lower-tax green vehicles."

He added that the growing market for green car insurance products meant drivers had a further opportunity to reduce their running costs

The research also challenged the widely held perception that green cars are more expensive than conventional vehicles, finding that the average price for the greener cars was £130 cheaper than the less fuel efficient models.

However, despite demand for the six selected green cars currently growing at 70 per cent a year, the study confirmed that they continue to represent a niche market with green cars expected to account for just 0.2 per cent of registered vehicles in the UK this year.

The report follows a similar study from accountants Grant Thornton which calculated that a company running a fleet of 50 company cars could save almost £60,000 over five years through lower fuel and tax costs by selecting from the 10 greenest cars on the market as opposed to the 10 most popular company cars.