Dealers are being urged to promote the new green label initiative to maximise sales from eco-conscious customers.

James Kelsey, a member of the motor trade sector at national accountancy group UHY Hacker Young says dealerships can attract buyers by using the scheme: "Businesses buying company cars are increasingly looking for environmentally friendly models to cut down on their tax bills.

At the moment, it's hard for employers to pick out the most tax efficient vehicles. Making them more easily identifiable can only be a good thing.”

The new label is the result of a voluntary agreement by carmakers following discussions with environment groups and other road transport 'stakeholders' under the responsibility of the Low Carbon Vehicle Partnership and will be displayed on all new cars in time for the new plate change in September.

It will see cars labelled from A – F, with A being the cleanest cars in terms of their CO2 emissions, in the same way white goods such as fridges and washing machines have been for several years.

The colour-coded label will also include information on fuel type, average fuel consumption and engine size.