When researching various electric vehicle salary sacrifice benefits, understanding which scheme might be the right fit for you and your company can often be challenging. Here are some reasons why:
- A lot of electric car schemes require a consultation or a call to understand the pricing and what is included.
- You won’t know if your company is eligible until you apply.
- The monthly lease could be too expensive for employees, or the early termination policy won’t be a good fit.
- There might be hidden fees that won’t appear until later in the implementation.
The main thing to keep in mind when comparing electric car salary sacrifice schemes is that you’re often comparing apples to oranges.
Many schemes will include different services and have different eligibility criteria and policies, which can make it harder to compare them directly.
What you really need to look for is quality of service and product and weigh that up with the monthly service cost. It’s also incredibly important to read through the fine print, so you know what you’re getting.
Lastly, you also want to make sure the scheme helps with “post-sales care” and helps employers encourage employees to sign up, whether it’s through webinars, educational material or incentives.
In this article, we’ll compare the top electric car schemes to help you decide and understand which solution might be the right fit for you.
- Best salary sacrifice car scheme comparison table
- Octopus EV
- Alternative salary sacrifice providers
Note: Looking to get started with a salary sacrifice scheme that has no hidden cost and offers flexible return options?
What to look out for when researching an electric car salary sacrifice scheme
Due to the increasing demand for electric vehicles, there are more electric vehicle salary sacrifice schemes that are set up every year.
Although many are legitimate and offer a great service, some are simply looking for a quick commission fee and will have artificially high monthly payments to cover costs.
When selecting an electric vehicle salary sacrifice provider, there are a few things you want to look out for:
Leasing a car means entering a long-term relationship with a provider, which means it’s important that you feel comfortable with the provider and trust that they will follow through on what they say.
For this reason, you want to ensure the team communicates clearly and quickly. Are their answers a little wishy-washy and not specific? Then it might be a sign that they don’t have high standards or simply don’t fully understand the complexity of an EV salary sacrifice scheme.
Once you set up the salary sacrifice scheme, employees will have many questions, so it’s important that someone on their team is responsive and can answer all their questions.
Read the fine print carefully
As we mentioned above, each salary sacrifice monthly lease will be different and include different services. Make sure to understand what you’re paying for and what the terms are.
For example, make sure to ask what the providers’ partners are. Are they self-insuring, or do they have a legitimate third-party and comprehensive insurance provider? If they are self-insuring for specific claims, could that be a risk if they are hit with too many claims?
Make sure you know what is included in the monthly lease and exactly what happens in case of early termination, including:
- Death (by any means)
- Parental leave
- Sick leave
You also want to know what happens:
- In the case of a car write-off: what happens if what the insurance pays out is lower than the net book value on the leasing company? (gap protection covers this, which is included as part of our default service offering).
- If a car has more wear and tear than usual.
- If an employee needs breakdown assistance.
- If an employee needs repairs (what is and is not included in the scheme).
After care and post sale
Getting the scheme set up is just half of the work: the other half is encouraging employees to use the portal and order a car. If you’re an employer who’s set this up for talent acquisition and retention, then you want to ensure employees make the most of it.
Yet many salary sacrifice schemes will mainly focus on signing up a company rather than taking care of what happens afterwards. Ideally, you want the confidence that employees will take advantage of the benefit – and that’s something that the provider should help with.
You also want to ensure employees have an outstanding customer experience when ordering a car. Ideally, they aren’t spending hours trying to order a car, and the experience is relatively intuitive.
Some questions you can ask are:
- What will the onboarding experience be like for the employee?
- How do you manage the employee’s salary and payroll?
- How are you going to help us activate employees?
- What happens after the set-up?
- Will employees get their questions answered quickly?
Most importantly, you want to ensure the company knows what they’re talking about and can offer guidance. Ideally, they should have a document that clarifies the responsibilities of each party, so you are not liable for employee errors.
We hope this comparison is practical and will help you navigate the field of electric car vehicle salary sacrifice schemes. If you have any questions on the scheme and how we operate, reach out to us and we’ll make sure to respond to any your queries.
Whilst we've attempted to summarise the most salient points for each of the main salary sacrifice providers, we always encourage any business to engage directly and conduct their own due diligence.
Comparing the best electric car schemes on the market
Before getting into the specifics of each scheme, note that most of the leading EV salary sacrifice car schemes include the following:
- They all offer salary sacrifice schemes, which will allow employees to pay their monthly lease from their gross salary and therefore pay less in income tax and national insurance contributions.
- They all offer electric cars which will result in a lower Benefit in Kind (BiK) tax and no road tax.
- They are all leasing companies, or broker the best deals from multiple leasing companies.
- They all offer monthly payments without large up front deposits (like the deposits typically found in traditional leasing).
- All include car insurance, breakdown cover, servicing, repair and MOT (although some are optional).
- All allow you to customise your car: from the colour and trim to the interior and additional features, you can personalise your brand new car to your requirements.
- Most cars are home delivered.
- Most offer a dedicated account manager.
loveelectric was founded when our CEO, Steve, wanted to switch to an electric car and discovered that salary sacrifice was by far the cheapest way to do this. However, he noticed some gaps in the salary sacrifice schemes on offer at the time, so decided to set one up himself to address the market gaps and help democratise electric vehicle access.
You can read more about our story here: Electric Cars are Expensive. Here’s How We’re Democratising Electric Vehicle Access At Loveelectric.
Here are some of the features and benefits of setting up a salary sacrifice scheme with loveelectric:
We’re specialists, so we take care of the entire process from start to finish.
Whereas other electric car schemes bolt on salary sacrifice as an additional feature to their core service offering, we are specialists in the EV salary sacrifice benefit.
That means we can set you up with the scheme from start to finish. We’ll write up the contracts, set you up with the employee and company portals, and help you manage payroll when it’s time to pay salaries.
It also means we know how to help employers encourage employees to take advantage of the benefit and order cars. Setting up the perk is just one part of the process – encouraging employees to use the benefit is also a big part where our expertise comes into play.
We’re a broker (not a leasing company), so we offer the best prices.
Many salary sacrifice schemes are operated by leasing companies who own the vehicles, which often means that the monthly lease cost can be higher. It’s a little bit like going directly to a retail bank for a mortgage rather than using a specialist broker that can access the best rates from a range of lenders.
We partner with major leasing companies, which means we have direct access to market-leading rentals. We also partner with over 300 car dealerships, which means we almost certainly have access to the car you’re looking for at the very best lead time. Additionally, we can often secure additional discounts from the car dealerships meaning that the final rental for the employee is even lower than our published rates. It also means that our monthly lease prices are almost always the best on the market.
Although a core part of what we do is sourcing the vehicles and arranging the finance agreements behind the scenes, we also help employers set up the scheme, educate employees and offer assistance throughout the entire engagement.
We’re strong on transparency, so you’ll know everything you’re paying for
With many car schemes, you might get initially excited with the affordably priced monthly leases viewed on the main page. But once you get set up, almost all the monthly leases will be more expensive and are likely to be a lot higher than a personal lease.
Different suppliers have different revenue models. For example, Octopus EV is a leasing company and sets the rental prices itself. They are much smaller than traditional leasing companies, owning around 10,000 vehicles. For comparison, large leasing companies could own over 350,000 cars.
By being smaller, it’ll mean Octopus can’t negotiate the strongest discounts with manufacturers. Additionally, they aren't owned by a retail bank, so their cost of capital will be a lot higher. It simply means their rental prices cannot match the ones of large leasing companies. And as a leasing company, rather than finding the best rates, they will simply offer their own products.
loveelectric and other brokers make money by charging a commission on top of the rental. However, that means you’ll want to know how much that commission is.
At loveelectric, we simply charge a small commission against the P11D value of the car (you’ll never pay more than 1.5%) which is incorporated into the prices you see on our site.
We also charge a small 3% administration fee - typically around £20/month - to the employer (based on the employee's gross lease cost) for each lease taken out with us. This is just to cover the ongoing costs of managing the lease over the 24/36/48 month period.
This cost is simply deducted from the employer's national insurance savings generated by the scheme, so the loveelectric service is cost neutral for your company.
Another crucial difference between loveelectric and other brokers is how we manage our funders. While many brokers work with a large panel of funders, this can lead to a deluge of Master Hire Agreements (MHAs) and invoices. From experience, we know this creates an administrative headache for employers and employees. At loveelectric, we've intentionally streamlined our funding panel to include only those funders that offer us a competitive advantage. This ensures the optimal balance between value and convenience for everyone involved while eliminating unnecessary paperwork and complexity.
In addition, we’ll provide employers and employees with all the information they need to make a decision, including a webinar, a driver handbook and an online community. loveelectric is also a B Corp (pending).
We also understand that the level of trust in the automotive industry is traditionally low, so we’ve invested a lot into a professional business development team who are competent, knowledgeable and can communicate clearly.
However, there are a couple of things to keep in mind when working with us:
We only offer electric vehicles with salary sacrifice
We don’t offer combustion cars or access to cars via Personal Contract Purchase, personal leases or business hire.
If this is quite important for your company, then a different supplier might be a better fit.
We’ll set you up with a smart home charger from one of our partners
We work with two partners, Hypervolt and Egg, to offer incredible deals on market-leading smart home chargers. Click here to read more about smart charging and our offers exclusive to loveelectric customers.
Who is loveelectric good for? Companies of any size that want to offer employees an affordable car and care about a good car ordering and employee experience.
We understand that loveelectric might not be a good fit for everyone and that other salary sacrifice companies might be a better fit at times. Here are some features of other salary sacrifice schemes:
Early Termination Protection
Some of the first questions employers ask when they reach out to us is: what happens if an employee leaves during the lease? Or if we enter a period of financial difficulty and need to make some employees redundant? Or if the worst happens; a vehicle is written off or stolen?
That’s where it’s important to have early termination protection in place.
All reputable EV salary sacrifice providers will offer Early Termination Protection - walk away if they don’t - however, policies can wildly differ in the level of protection they actually offer both the business and employee.
loveelectric | Flexible Return Options
At loveelectric, we provide one of the best policies on the market.
But, our industry-leading protection is only used once we've explored every other option for the car on your behalf. Our unique Flexible Return Options are essentially a 4-step safety net, which means we only claim against the termination protection as a last resort.
At all times, if an employee resigns they can transfer the lease to another employee or take the lease with them to their new employer (if eligible) at no extra cost.
If the driver terminates the lease:
At all times, if an employee resigns they can transfer the lease to another employee - either within their company, or amongst the thousands of other employees across our entire company base. Alternatively, they can take the lease with them to their new employer (if eligible) at no extra cost.
If the employee resigns after 3 months into the lease (and doesn’t transfer the contract or take it with them to a new employer) they will only have to pay a one-off fee: just 1 x month of the gross lease payment.
For example, if their gross monthly lease is set at £500 per month for a 24-month term and they resign at month four, the termination fee would be £500. Keep in mind that this amount cannot be paid via salary sacrifice: the fee is the gross amount before tax. This creates positive friction in favour of employers and typically lowers attrition rates. The nominal fee encourages employees to opt-in to a length of contract that's suitable to them, leading to a significant decrease in the monthly premium for those who see the lease term through to completion.
If the employee resigns in under 3 months (and doesn’t transfer the contract or take it with them to a new employer), early termination protection cannot be applied and the employee would be liable for up to 50% of the rest of the lease. However, our deferment period is much shorter compared to other salary sacrifice suppliers, making this eventuality much less likely with loveelectric.
We are the only provider to offer full GAP protection if the vehicle is written off. GAP protection ensures that the employer isn't left with £1000s worth of shortfall between the retail value of the car, compared to the leasing company's valuation.
If the employer makes the employee redundant after 6 months, the employer will pay a one-off fee worth the gross amount of one month of the lease payment. This can then be recovered directly from the employee's next/final net salary. Because it is taken from source, the employee cannot default on this payment. We believe this is a benefit to the company, as a nominal termination fee introduces positive friction at the point of sale, ensuring employees do not simply opt for longer leases as they are often cheaper, whilst having the intention to leave the lease after 12/24 months without any further commitments. This reduces employee attrition and decreases the monthly lease cost for those who see their lease through to the end of the agreed term. It's a bit like an 'excess' on an insurance policy which reduces the monthly premium.
Read more about our unique Flexible Return Options here: Early Termination Protection for Salary Sacrifice Car Scheme: How It Works And What You Need To Know
Tusker has provided salary sacrifice schemes to companies for over ten years and offers everything from fleet management to brand new electric cars and company cars.
- Employees can access, combustion, hybrid and electric cars.
- They have a Carbon Standard offsetting project that offsets all their salary sacrifice cars.
- Employee portal (driver site).
- They offer cars via contract hire and salary sacrifice.
- They offer daily rental service.
- Employees can buy the car after the lease period is up (however you won’t get a settlement figure in advance)
- They allow employers to set up an entire car fleet.
- Option to buy the car at the end of the agreement.
What to keep in mind:
- They offer “lifestyle protection”
- Tusker do not offer anything similar to the reloveelectric used EV marketplace.
- Tusker works with all company sizes.
- Tusker offers numerous post-care options; dedicated account managers, an employee engagement team and customer excellence team.
Who’s Tusker good for? Organisations that want to offer both EVs and combustion engine cars as part of an employee benefit.
Tusker's Early Termination Protection
Circumstances that Tusker’s Early Termination Protection doesn’t cover:
- Career Break
- Reduction in Working Hours
- Breach of National Minimum Wage
- International Secondment
- Loss of licence not on medical grounds
Circumstances that Tusker’s Early Termination Protection does cover with the deferment periods:
- Redundancy (after 3 months)
- Resignation (after 3 months)
- Long Term Sick (after 3 months)
- Death by any reason (from Day 1)
- Loss of licence on medical grounds (from Day 1)
- Parental leave (after 3 months but no rent-free period)
Octopus is best known as an electricity and gas provider, but in 2018 they branched out to electric vehicles and a salary sacrifice scheme.
- At home charger and installation
- 4,000 miles of charging
- Employees can do test drive days – only for larger companies
- Employees are tied to Octopus’ own app, “Electric Juice”.
- HR portal.
- Option to buy the car at the end of the agreement (however you won’t get a settlement figure in advance)
- Offer business contract hire.
- Can set up a fleet solution.
- Offer personal leases.
- They are a leasing company and own some of the cars.
Keep in mind
- Lease prices are higher because they are a leasing company that is considerably smaller than the market leaders.
- The cost of the charger is bundled into your lease price regardless of whether you need one, or can even have it installed.
- They have the longest deferment periods for termination protection of any provider across the board, leaving employers and employees at higher risk, for longer.
- Early termination only covers 10% of claims or 10 cars. They do not offer anything similar to the reloveelectric EV marketplace.
- You are tied in to their full bundle, which may be right for some employees, but almost certainly will not be right for all employees.
- They do not offer GAP insurance. This can result in the employer being left with a shortfall worth £1000s if a car is written off or stolen.
Who is Octopus EV good for? Employers and employees who want everything bundled together.
Octopus EV's Early Termination Protection
Circumstances that Octopus’ Early Termination Protection doesn’t cover:
- Career Break
- Reduction in Working Hours
- Breach of National Minimum Wage
- International Secondment
- Loss of licence not on medical grounds
Circumstances that Octopus’ Early Termination Protection does cover with the deferment periods:
- Redundancy (after 6 months)
- Resignation (after 6 months)
- Dismissal (after 6 months)
- Long Term Sick leave (after 6 months)
- Death by any reason (after 6 months)
- Loss of licence on medical grounds (after 6 months)
- Parental leave (after 6 months but no rent-free period)
Alternative salary sacrifice providers
With salary sacrifice becoming such a popular employee benefit, it's entirely possible you are looking at an alternative provider that may have entered the market more recently.
When evaluating any of these alternative providers, we would recommend that you investigate the following when speaking to one of these alternative providers:
- Do their indicative monthly prices require a deposit or increased upfront cost for a portion of the lease?
- How much extra administrative burden does the scheme place on your HR & Payroll staff?
- Do they offer anything like reloveelectric, thereby reducing the risk of incurring early termination penalties?
- Do they offer GAP Insurance in the event the car is written off?
- Does their company ethos reflect your own business values?
As we’ve demonstrated above, there are lots of salary sacrifice providers out there, but not all are created equal. But by following the guidance above and carrying out your own due diligence, you can make a fully informed decision about which salary sacrifice provider to go for.
We hope our comparison has given you enough information to feel confident in your decision-making process. There's lots to digest and pieces of marketing to wade through when choosing which provider to opt for, which is why we've attempted to collate all of the relevant information into one handy guide. Of course, please go and do your own due diligence, our only advice would be to really delve into the following points when speaking with other providers:
- Early Termination Protection (ETP): this is the backstop of protection for both your business and the employee, so it's important to get right. It's also important to consider who the policy is underwritten by i.e. could the provider pay your claim if it coincided with with a number of other insurance claims from their other businesses?
- Best monthly prices: most salary sacrifice providers are able to offer between a 30-60% saving on the usual cost of an electric car lease. But a 30-60% saving on what? If the initial price of the lease is higher, then so will be the final savings figure. It's always worth running some indicative quotes with different postcodes, salaries and with or without insurance - this will give you a more accurate idea of what the monthly price will be for your staff members.
- Ease of use: although cost-neutral to implement, some salary sacrifice schemes place a huge amount of administrative burden on those that are responsible for running the scheme internally. According to a survey amongst our client companies, 'ease of use' was the second highest reason that our customers chose loveelectric over competitors. Don't get caught out with mountains of paperwork, check how intuitive a provider's portal is and the admin involved.
- Ethical business practices: employees are becoming increasingly sensitive to workplaces that reflect their own values. A key way to show this is through the benefits you offer staff. Our transparent pricing, BCorp (pending) status and ethical approach to business ensures our customers that we're not out to make a quick buck and run. We see implementing our salary sacrifice scheme as a partnership, here to support you long after the scheme goes live.
Good luck on your deliberations and we look forward to implementing our industry-leading salary sacrifice scheme with you soon.
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