Drivers' lack of understanding of the links between CO2, taxes and fuel costs could be hitting fleet budgets as well as their attempts to reduce carbon emissions

A survey of more than 2,000 drivers, most of whom were company car drivers, found that only 17% think that they will save on fuel costs if they change their driving habits to produce less carbon dioxide

The survey, carried out by Alphabet, also found that just 15% of drivers plan to drive a lower-CO2 car in future to save on tax.

In addition, 88% of drivers were still ignorant about how much CO2 their car emits, and 76% do not know what Vehicle Excise Duty tax band their car falls into.

"Our survey suggests that eight out of 10 drivers are vague about the financial advantages of reducing CO2,” explained Mark Sinclair, director Alphabet.

“This implies that fleets are unlikely to benefit from cost savings offered by running more efficient vehicles unless they have strict policy guidelines in place to ensure that employees drive greener cars."

For example, drivers who opt for cars emitting 145g/km of CO2 instead of a typical 165g/km stands to cut their fuel use by 12% and their company car tax by 20%.

Their employer would also benefit from lower business mileage costs and NI, and future savings through lower VED and from more advantageous writing down provisions on cars emitting less than 160g/km of CO2.

"It is clear that much more needs to be done to make drivers aware of the links between CO2 and the costs of motoring - particularly the amount of fuel they use and the taxes they pay," said Mr Sinclair.