car key woth green leaf key ring(Photo: istockphoto)

You hear lots of buzz about new environmentally friendly cars entering the market - some are hybrids, some run on ethanol, and some are electric. Sorting through the maze of options can be dizzying, but the Environmental Protection Agency (EPA) and Department of Energy (DOE) are helping by bringing the essentials to light on new fuel economy labels that highlight basic facts and figures and clarify important details. Regardless, to narrow in on a particular type of green car you need to think about your unique needs, usage, and tolerance to change. In addition to the upfront cost, take a look at the annual fuel cost (on the fuel economy label). A car that saves $2,000 in gas per year will save you $10k in just 5 years. Below, an explanation of each technology, and whether it could be right for you.

Hybrid: We hear the most about hybrids as they've been around for some time, and come in all kinds of flavors (sedans, SUVs, and stereotypical hybrids like the Toyota Prius and Honda Insight, and sport hybrids like the Honda CR-Z). Hybrids use a gas engine, as well as an electric motor to supplement in stop and go traffic or when you accelerate when you're getting on the highway. The batteries that power the electric motor are charged using energy from braking or the engine when it's under low-strain. You'll find the advantages of a hybrid most useful if you primarily do city driving and often find yourself stuck in traffic, but they're also great all-around.

Electric: Electric cars have been around much longer than hybrids. In fact, they were hugely popular in the early 1900's, rivaling gas cars on the road. While electric cars can be costly upfront, large federal and state subsidies are available and a 100 mile charge will only add about $2 to your electric bill. If you opt for one, you'll probably want to install a dedicated charging station in your garage. To help minimize range anxiety and make electrics more practical, commercial charging stations are being installed around the country and are capable of charging much quicker than residential units. Even still, electrics have an inherently short range. An electric car, like the Nissan LEAF, makes economic sense as a second car for local commuting.

Plug-in Hybrid: A plug-in hybrid exists somewhere between the realm of a hybrid, and electric; essentially, a hybrid with larger battery capacity. Plug-in hybrids charge from an outlet similar to electric cars and generally have an all-electric range of about 20 miles. The Chevy Volt is an example of a plug-in hybrid, although Chevy refers to it as an extended range electric. Plug-in hybrids can be run on electricity-only for short commutes, but can also be driven indefinitely on gasoline. They're perhaps the most practical type of electric car. Currently there are few on the market, but look for a plug-in version of the Toyota Prius in 2012.

Diesel: Diesel fuel is most widely used in large trucks, but BMW, Mercedes Benz, and VW in have put extensive resources into making diesel cars practical and clean in the US. Emissions laws have historically held back diesels here, but it's not uncommon for diesels in Europe to achieve 50 mpg. Diesel offers better fuel economy because it's more energy-dense and burns more efficiently. If you do a lot of highway driving, you may find a diesel like the 2011 VW Jetta TDI economical, despite marginally more expensive fuel.

Flex-Fuel: Flex-fuel vehicles can accept either gasoline or E85, a blend of 85% ethanol and 15% gasoline. Ethanol can be produced from a variety of bio-based sources, so in theory ethanol can be considered a renewable resource. Unfortunately, the ethanol you buy at a gas station is corn-based, which is highly controversial because increased demand is not only at odds with food supply, but ethanol is also energy-intensive to produce. Additionally, ethanol is less energy dense which means fuel economy will drop by around 20%. Using ethanol isn't likely to save you money, but other crops like switch grass, or sugarcane (used in Brazil) have the potential for greater environmental benefit off in the distant future.

Gas: Although gas engines are based on old technology, newer engines have been improved in ways that squeeze out more mileage. Small gas cars are also lightweight, perhaps the most important factor when looking at influences on fuel economy. And because they don't have heavy batteries, electric motors, and fancy control systems they're the most affordable option. Cars like the Ford Fiesta start at around $13,000 and can get up to 40 mpg on the highway.

Check out our hands-on reviews of 17 fuel efficient sedans each with 32mpg combined or higher, and see how we tested.