The average engine size in a small family car has reduced by 4% while power output has risen by 12% and miles per gallon have improved by 16% over the last eight years.

Figures from CAP tracking the progress of the improved technology since 2003 also show that the average CO2 output has fallen by 18% over the period.

David Saville, who runs CAP’s new vehicle data, said: “The automotive industry has made massive strides in improving the efficiency of engines and this is paying dividends for hard-pressed motorists who need more than ever to keep spiralling fuel costs in check.

“Take the example of a leading small family car, the Volkswagen Golf. Back in 2003 a Golf 1.6 litre petrol engine had a power output of 105bhp, with a combined cycle fuel consumption of 39.8mpg, and produced a CO2 figure of 170g/km. This vehicle would have cost £831 to fuel over 10,000 miles at 2003 pump prices.

“Move forward to 2011 and the latest generation Golf and we have a 1.2 litre pressure charged engine, producing 105bhp with combined fuel consumption of 49.6mpg and a CO2 figure of 134g/km. Fuelling this latest Golf over 10,000 miles at current prices would cost £1,199.

“Without those new engine improvements the Golf would cost £1,494 to fuel at today’s prices, proving how important engine downsizing and ever increasing efficiency is for the motorist’s budget.”

Another key sector for private motorists that has benefitted from engine downsizing and increased efficiency is the small MPV. One of the mainstays of this sector, the Renault Scenic, offers more evidence of the benefits of improved engine technology.

The 2003 model Renault Scenic 2.0 had a power output of 140bhp, with CO2 of 190g/km and combined MPG of 35.3. So, using 2003 fuel prices and annual mileage of 10,000, this car would have cost £938 to fuel for a year.

Moving forward to 2011, Renault offer the latest Scenic with a 1.4 turbo charged engine outputting 130bhp. This model produces 168g/km of CO2 and returns 38.7mpg on the combined cycle. Using the latest fuel prices this vehicle would cost £1,537 to fuel over 10,000 miles.

Today the old 2.0-litre Scenic would cost £1,685 to fuel over the course of a year.