The idea is to provide clear 'at a glance' information on the running costs, fuel consumption and emissions of used cars available from participating dealers.
The initiative builds on the success of the new car fuel economy label, which is now widely recognised by consumers.
The voluntary initiative was developed by the Low Carbon Vehicle Partnership (LowCVP) with support from the Retail Motor Industry Federation (RMI), the Society of Motor Manufacturers and Traders (SMMT) and the Government.
The scheme was launched to the automotive trade in early August and, so far, over 2,000 dealers have signed-up to take part.
The colour-coded label provides easy to read information on a car's make and model along with its CO2 emissions, estimated fuel cost over 12,000 miles and MPG.
Dealers can choose only to label cars up to two years old, or to label older cars manufactured as far back as 1st March 2001.
97% of dealers signed-up to date have said they intend to label cars dating back to 2001. Sales by private individuals are not covered by the scheme.
Minister for Transport Sadiq Khan MP said at the launch "Running costs and environmental performance are increasingly important to new and used car buyers.
"I am therefore delighted that the new car label is now joined by a similar used car label."
