Guest Post Author Bio: This post was written by Money Supermarket.

Picking the right car is a far more complicated job than what it used to be. In the olden days you could just choose a car based on its looks, reliability and performance. However, things are much more difficult now as the running costs required to keep a car on the road are escalating out of control.

A survey conducted by the MoneySupermarket.com car insurance division revealed that 65% of motorists will consider fuel economy and basic running costs the next time they purchase a new vehicle. This is not surprising when you consider that the cost of a barrel of oil has increased by 175% over the past decade. On top of this, car insurance prices have increased by over 40% in the past 12 months due to both insurance fraud and the trauma within the financial markets.

With environmentally friendly vehicles becoming increasingly popular, car manufacturers are putting much more effort into their green machines. This means that you no longer have to own a car which is detrimental to your household expenditure in order to be environmentally friendly. We took a look at the various options which are available for purchase in order to see which one is the biggest bang for the motorist’s buck.

Diesel vehicles

Diesel cars developed a rather poor reputation during the 1970s and 1980s due to the fact that they generally lacked both performance and reliability when compared directly with their petrol fuelled alternatives. However, huge strides have been made in the development of diesel vehicles which are now not only on par in terms of performance and reliability with their petrol alternatives, but also more economical in terms of their fuel efficiency.

The latest 1.6 litre petrol version of the popular Ford Focus for instance has an average fuel consumption figure of 47.9 miles per gallon (mpg). The 2 litre diesel version however, has an average figure of 56.5 mpg. Although it is true to say that diesel costs more per litre than petrol, it also last longer. The average driver completing 12,000 miles per year would therefore save about £200 ($322) per year on fuel costs alone by opting for the diesel version of the model. This is on top of the road tax saving of £130 ($209) each year which is available on account of the diesel model producing less C02 than the petrol version.

However, the big problem is that the diesel model is between £1,000 ($1,608) and £1,500 ($2,412) more expensive than the petrol version. It would therefore take between three and five years to recover this additional expenditure before overall cost savings can be experienced.

Verdict: The diesel Focus follows the trend observed in other car manufacturers in that it costs less to run than its petrol alternative, but it also costs much more to buy initially. This negates the advantage when it comes to purchasing a diesel Focus, but this may not be the case with other manufacturer’s offerings. It therefore makes sense that you check out the potential savings available with the diesel version of a model in your consideration set before committing to the petrol version.

Hybrid

Toyota became the first manufacturer to mass produce a hybrid vehicle in 1996 with the introduction of the Prius model. Fifteen years later it still  has a major presence in the hybrid market with a formidable share of the market. Thanks to its electric supporting motor, the petrol fuelled vehicle is capable of 65.7 mpg and is exempt from road tax charging. On top of this, a number of car insurance companies will now offer discounts of up to 10% for owners of vehicles construed as being environmentally friendly.

However, the big drawback of the model is once again the initial purchase cost. The Prius costs £20,845 ($33,522) to buy from new, which is almost £5,000 ($8,041) more than a new petrol version of the Ford Focus.

This has left a gap in the market which has happily been filled by Volkswagen with their new hybrid Bluemotion.  The diesel fuelled vehicle has an impressive average consumption figure of 74.3 mpg, but only costs £1,400 ($2,252) more than the petrol Ford Focus. This is despite the savings possible thanks to its impressive fuel consumption figure, its exemption from road tax and its eligibility to the benefit from the car insurance savings available through many insurers.

Verdict: The Prius is still a bit expensive when it is put into the context of the running cost savings it provides. This is an opportunity which has been seized by Volkswagen with their Bluemotion range which is a remarkable value for money, offering a total running cost saving of about £775 ($1,247) every single year compared to a petrol Ford Focus model. It would only take just under two years to recover this running cost saving, and is therefore well worth the purchase for the majority of motorists.

Electric

Nissan was caught short once by arch-nemesis Toyota when it came to the hybrid market, so it was not going to let this happen again. It therefore became the first car manufacturer to mass produce a vehicle powered only by an electric motor when it introduced the Nissan Leaf last year.  The vehicle has obtained mass plaudits for being a “future proof” solution to the declining supplies of raw oil supplies and won the prestigious European Car of the Year competition at the end of 2010.

The Leaf has a range of 100 miles between charges and a more than acceptable top speed of 92 mph. It is estimated that it would take the average driver completing 12,000 miles per year just £300 ($482) to recharge the vehicle; equating to a total fuel saving of about £1,300 ($2,091) compared to a petrol Ford Focus. This comes on top of the £160 ($257) road tax saving and 10% insurance discount.

However, there are two major drawbacks with the Leaf. It costs £25,990 ($41,790) to buy from new which is almost £10,000 ($16,079) more than a petrol Ford Focus. Additionally, the under-established recharging station infrastructure in the developed world means that travelling more than 50 miles away from home is very impractical and unrealistic.

Verdict: The world simply isn’t ready for the electric revolution, but the Leaf would make the ideal commuter car for the average person or even a fantastic city run around vehicle. Unfortunately the high initial pricing renders this impractical. However, the Leaf is still a remarkable first step towards a fully green motoring fleet from Nissan.

Conclusion

The average motorist has been caught in a corner when it comes to the rising cost of motoring, with 65% of motorists admitting to being on the look out for an environmentally friendly car. Sadly these motorists have been handicapped by the high initial purchase costs required to buy such a green  machine.

This  however, has all been rectified by Volkswagen, who has become the first manufacturer to produce an affordable hybrid; a move that is going to turn the industry on its head by making the green car industry mainstream. It is now finally possible to obtain an affordable vehicle with good performance that is both environmentally friendly and economically sensible.

While the Leaf is a brave first step from Nissan which points towards every car manufacturer’s future direction, it is too soon for this type of innovation to become main-stream; a situation which mirrors the position of the Toyota Prius fifteen years ago.

So, have you considered buying a green car? What process did you go through to make your decision? Please share.