Car clubs are to get an extra £40,000 of government funding on top of a £57k cash injection they received seven months ago.
The money will be spent by Carplus (the national transport charity) to promote the role of car clubs that allow access to low-carbon vehicles for short periods of time, often by the hour on a pay-as-you-go basis.
The clubs have increased in popularity with the number of members increasing from 22,000 in 2007 to more than 127,114. Usually a member can take a low-emission city car for an hour for a charge of about £5.
Transport Minister Norman Baker said: 'The coalition government has been clear in its commitment to sustainable travel initiatives such as car clubs to help achieve a greener and more sustainable transport sector.
'The figures speak for themselves - each car club vehicle can result in taking 24 private vehicles off the road and the low-carbon vehicles used typically emit approximately 33% less CO2 than the average car. This is why we are supporting the continued growth of car clubs across the country.'
Research has shown that pay-as-you-go car clubs reduce car use and support other sustainable travel initiatives by plugging gaps in journeys.
The Mayor of London, Boris Johnson, said: 'Car clubs are a brilliant idea and membership is booming in the capital. A quite staggering three quarters of the UK's car club cars are located in our great city, and Londoners joining up have found they are able to save thousands of pounds by avoiding all the hassle of repairs, services and insuring their vehicles.'