Toyota iQ1

Nobody likes to waste money at the best of times, and in the current recession it's particularly important to make every penny count. But while it's easy to cut back on luxuries, many people rely on their cars to get through their daily lives. Modern motors are convenient, comfortable and quick, but while owning a car is affordable for most, it still involve a range of costs.

Fortunately, whether you're buying a new car, or insuring, maintaining and driving one you already have, there are numerous ways to save your cash. Here we take a look at some of them.

Choosing the right car - CO2 emissions and tax bands

For all new cars (and all cars registered after 1 March 2001) the amount of tax you pay is based on the amount of carbon dioxide (CO2) that the car's engine produces. The lower the number, the less of the greenhouse gas the car will emit, and the less you'll pay.

Band A cars such as Toyota's iQ - currently the only petrol car in this group - produce less than 100 grams of CO2 per km and are free to tax. It costs £15 a year to tax a car in Band B such as Toyota's current Prius hybrid, but it can cost up to £405 for the biggest gas guzzlers.

You can check out the CO2 figure for any car currently on sale by using the Government's new car calculator at Act On CO2.

Fuel consumption

Another thing to consider is the fuel consumption. Although this is closely related to a car's CO2 output, cars with identical CO2 figures don't always get the same number of miles from a gallon of petrol.

And of course, the further you drive the more you'll spend on petrol, so choosing the most efficient car you can could save you a small fortune over the time you have it. There are sites online which can help you to choose the right car, based on your lifestyle and needs.

Try looking up the cars you are interested in at the VCA Car Fuel Database, or using the advice available on websites such as Clean Green Cars. Once you've got a car, you can even shop around for the cheapest places to buy petrol in your area by using a fuel comparison site, such as www.petrolprices.com.

But the amount of fuel you get through isn't just down to the car you choose - how you drive it makes a huge difference. While you may not want to go to the lengths of fuel economy testing in a Toyota iQ, you can knock pounds off your fuel bill simply by driving smoothly, anticipating the road ahead and keeping within speed limits.

Other safe and simple ways of being more fuel efficient include turning off the air conditioning whenever you can, and keeping tyres inflated to the recommended pressure.

Shop around for insurance

Once you have weighed up the tax-saving benefits to be gained from a new, fuel-efficient car, it's time to think about shopping around for insurance.

The internet has made it easy to get the cheapest car insurance quote, either by visiting several insurance companies directly, or by checking a price comparison site such as www.confused.com, www.moneysupermarket.com, or www.comparethemarket.com.

Comparison sites allow you to compare the prices of hundreds of different insurance providers without entering the same information multiple times - helping you find exactly the right insurance cover at the lowest cost. When you're looking for the cheapest quote, though, make sure you're comparing similar levels of cover and the same excess amount.

Scrappage

One recent incentive that could really help with buying a new car is the Government's car scrappage scheme, which has just come into effect. The scheme allows anyone with a vehicle that's 10 years or older to apply for a £2,000 allowance against the cost of a new car if they scrap their old one.

The aim of the idea is to help boost the UK car industry, and to replace older, inefficient cars with newer versions. These will typically offer not just better fuel consumption and lower tax, but will also benefit from at least 10 years of improvements in safety and performance.

Toyota is one of the major UK manufacturers taking part in the car scrappage scheme, under which you could drive away in a new Toyota from under £7,000. You can find out more about how the scheme works from the Toyota scrappage page.

All Toyotas now benefit from Optimal Drive Technology - a range of improvements that result in better performance and economy.

The technology includes new, lighter engines and, improved transmissions to enhance performance at the same time as improving fuel economy, and lowering CO2 emissions. Some models also feature gearshift indicators, so you never miss the most efficient moment to change.

With Optimal Drive, you'll save money and minimise the environmental impact of your motoring. And the helpful fuel economy and road tax calculator on Toyota's website allows you to easily compare Toyota models with competitors from other manufacturers.

The calculator lets you compare a number of important points - including three-year running costs, power, efficiency, road tax and residual value - so you can make an informed decision about your next car.

Toyota UK is a manufacturer of hybrid cars and new cars. If you're interested in Toyota, its cars, technology or ideas, why not visit Today/tomorrow - the official blog for Toyota UK? We've got a team of writers bringing you regular updates on Toyota's cars, including exclusive coverage of soon-to-be released models like the next generation Prius and the ground-breaking technology behind them.