Kings Lynn Volkswagen is saving around £36,000 annually by reusing its waste engine oil to heat its showroom and workshop.
The Norfolk-based dealership has replaced its heating boiler to a specially engineered heating system which runs on the oil.
Brand manager Martin Bennett researched the recycling scheme for 18 months before selecting the right system that would meet business needs.
The result has been a reduction in carbon footprint by 10.3 tonnes, which equates to ten jumbo skip bags.
"We felt as a business we should take responsibility for the energy we were wasting," said Bennett.
"Having implemented all the obvious changes such as steel, paper and tyre recycling and fitting timers to various electric equipment, we felt there must be more we could do to make a greater impact."
As well as installing an energy-saving boiler the Volkswagen site has also fitted washable filters to prevent further wastage and cost by using disposable alternatives.
It will also install solar panels to generate its own hot water and a rain water irrigation system to supply its car washing facility.
Both projects are expected to be in operation by the end of 2009.