Nevertheless, with roughly one car for every two people, it's probably fair to say that the UK is still in love with its cars. So, if you are considering buying a vehicle - whether new or second-hand - what do you need to know about recent developments in the car tax system?

VED - an overview

Applying to cars registered from March 2001 onwards, there are 13 VED (Vehicle Excise Duty), or tax bands, based on CO2 emissions. Band A is for cars which produce up to 100g of CO2 per km travelled - typically, hybrids, and some petrol and diesel cars with smaller engines. These pay no car tax at all - a clear message that lower-polluting cars are finding favour with those in power.

For each subsequent band, the rate of VED increases, with even a relatively modest 1.6-litre petrol version of the popular Ford Focus slipping into band G (with emissions between 151-165g/km), and attracting a £165 rate.

In fact, above 120g/km (band C), all the rates have increased in cost for 2011-12, compared to the previous year. Below this level - in keeping with the Government's drive towards providing an incentive for buyers to go for less-polluting models - there has been no price inflation for 2011.

At the upper end of the scale, this now sees owners of cars which produce more than 255g/km - typically, the largest executive saloons, sports cars, and bigger 4x4s - hit with a VED bill of £460.

Showroom to road

And there's more. The old saying - that as soon as you drive the car off the showroom floor, you start losing money - is as true today as ever. And since April 2010, there's another potential financial penalty waiting for you behind the gleaming windows of the garage.

The so-called 'Showroom tax' was brought in by the Government as a first-year-only payment, as a way of steering buyers of new cars towards vehicles which emit lower levels of CO2 - and away from those gas guzzlers which produce higher emissions.

Effectively replacing the VED rates for the first year only - car tax reverts to these standard rates from the second year of a vehicle's life - this can make a significant difference to how much duty you pay in the first year.

For 2011-12, this means that cars which produce up to 130g of CO2 emissions per km travelled - those in bands A to D - pay no car tax at all for the first year. Cars in this category include a range of hybrids and smaller-engined diesel and petrol cars.

Buy a car in band E - which can include cars as small as certain versions of the Ford Fiesta supermini - which produce CO2 emissions of just 131g/km though, and you will be paying £115 for the first year.

Showroom tax climbs fairly rapidly after this point, with significant jumps even between bands F (£130) and G (£265). For the most-polluting cars - which produce more than 255g of CO2 per km - you will pay a hefty £1,000 for the first year.

All of this means it pays more than ever to really consider what you need from your car, and how much power you really need. With levels of engine efficiency differing between manufacturers - and even between models within ranges - it's not always obvious which cars are going to have higher emissions. Nevertheless, there is still a broad relation between the size of an engine and the pollution it produces. Directgov provides a useful tool which easily lets you find the emissions details for new and even used cars.

And while you weigh up what car is the best fit for you - while avoiding any unnecessary expense - you could consider looking online to find the right level of good value car insurance cover that makes sense for your usage and lifestyle.