A new system of road tax for cars, based on carbon dioxide emissions, was introduced this month.

From March 1, new cars are placed in one of four tax bands according to the level of carbon dioxide they produce.

Within each band there are three tax rates, reflecting the type of fuel used by the vehicles and the level of emissions of other pollutants.

The new vehicle excise duty ranges from £90 for a Band A car powered by alternative fuel, up to £160 for a diesel-powered car in the highest bracket, Band D.

Transport Minister Lord Whitty said: "This is the most important change to vehicle excise duty for cars for decades. Now the system of car tax will provide clear signals to car buyers about the environmental impact of the cars they buy.

"Carbon dioxide emissions depend on fuel efficiency, so by buying a car in a lower tax band you will save on running costs as well as doing your bit for the environment. And it pays to think carefully - even cars of a similar size cars vary greatly in fuel efficiency."

The new system applies to cars first registered from March 1, 2001. Cars registered before then will continue to be charged by engine size. Cars under 1549cc pay £105 and those over 1549cc pay £160.