Salary Sacrifice Car Schemes - Are They Still A Thing?

Salary Sacrifice Car Schemes - Are They Still A Thing?

Salary sacrifice schemes, often hailed as the ‘golden ticket’ when it comes to company cars allow employees to offset their salary and take advantage of an offer they wouldn’t get on the highstreet. However, with global issues such as COVID and the energy crisis affecting the car market, there have been a catalog of issues with clogged supply chains and a shortage of raw materials, resulting in long delays for people keen to get their hands on new motors, are those deals a thing of the past or very much available?

Mercedes-Benz CEO Ola Källenius recently said he expected “gradual easing of supply chain constraints” but challenges from the macro economic environment, including higher rates despite sales predictions totalling 74 million vehicles in 2023, 4% higher than last year but still 8% lower than pre-pandemic levels.

Steve Thornton, CEO of Motor Source Group, who have secured over 37,000 deals to date for motorists across the UK said “Salsac gives an employee the most cost effective way to drive an electric or plug-in hybrid car, both cheaper vehicles to run than traditional petrol or diesel vehicles. When lenders tighten their criteria for lending and underwriting, some employees may struggle to get finance in place for an EV or PHEV. With no underwriting requirements for the employee, salsac scheme can give those employees access to vehicles they may not necessarily be able to afford or get the finance approved.

All service, maintenance, cost of replacement tyres and insurance costs are rolled into one single payment meaning the employee can offset those additional running costs before tax & NI and achieve a very favourable cost reduction through the scheme, ideal in times of increasing costs of living and motoring expenses. The right deals can save the employee over 40% when compared to personal lease costs on the equivalent vehicle.

Employers can play their part

Great CSR messaging which is powerful PR and also assists companies on their net zero journey. We recommend all employees look at promoting the program, even if many of their employees do not take a company car allowance or are an essential car user. The program can be opened up to all employees which promotes the use of EV’s and super green cars like PHEVs – giving employers the capability to transform their staff car park into a car park full of zero emission vehicles. Also, being super reliable, fully covered for all breakdown and servicing eventualities means the employee will not be hindered by motoring issues which may interfere with their working day.

Employers can use the program as an excellent employee benefit which can both assist in recruitment and retention of staff.

Risk to Employers

Virtually risk free to the employer – as early terminations, leaver protections, maternity, paternity and sickness cover all included in the program. This ensures the employer is not exposed to any early termination fees as the vehicle is simply returned back to the leasing company without penalties. We’ve found the number one concern for employers is the fear an employee leaving and the company being stuck with the vehicle. With Motor Source Group, the answer is simply NO, the employer will never be stuck with cars or penalties, regardless of the number of early returns. In contrast, there are limits with other companies as to the amount of cars that can be returned early on the program, typically 10-20% of the fleet. It’s fair to say we have employers concerns covered and that’s something we’ve worked hard to achieve.

We recognise that businesses require flexibility more than ever, which is why we also offer exclusive 12 month salary sacrifice offers. Very unique in the marketplace. This gives an employee/employer opportunity to try an EV on a shorter lease to make sure the vehicle meets their expectations and any possible business requirements if the vehicle is used for business.”

Salary Sacrifice Car Programs - Are They Still A Thing?