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Best Salary Sacrifice Car Scheme in the UK — Which One is Best for You?

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When researching various electric vehicle salary sacrifice schemes, 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 five electric car schemes to help you decide and understand which solution might be the right fit for you. 

We’ll discuss:

Note: Looking to get started with a salary sacrifice scheme that has no hidden cost and offers the best early termination policies? Get started with loveelectric for free.

Comparing the best electric car schemes on the market

Below is a chart summarising some of the leading electric car schemes in the UK. 

Before getting into the specifics of each scheme, note that most of the five electric vehicle 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 directly authorised by the Financial Conduct Authority (FCA), apart from the Electric Car Scheme which is an Appointed Representative of a firm that is directly authorised.
  • None require an upfront deposit from an employer or employee.
  • All include car insurance, breakdown cover, servicing, repair and MOT (although some are optional).
  • Most have early termination protection (but each one will include different terms, so make sure to ask).
  • 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.

Since we’re the ones who are writing this article, we thought we would start with ourselves.

loveelectric

loveelectric was founded when our CEO, Steve, wanted an electric car and realised that purchasing one was out of budget. He noticed some other issues with salary sacrifice schemes and 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 salary sacrifice electric car scheme.

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 portal 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 scheme and order cars. Setting up the scheme 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. 

loveelectric dashboard

We offer the best early termination terms on the market for complete peace of mind

One 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?

That’s where it’s important to have early termination protection in place. And at loveelectric, we provide one of the best policies on the market.

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.

Employees:

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 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 worth one 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 salary sacrificed so the fee will the gross amount before taxes.

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.

Employers:

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. 

Read more about our early termination protection here: Early Termination Protection for Salary Sacrifice Car Scheme: How It Works And What You Need To Know

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, Tusker and Octopus EV are leasing companies and set the rentals themselves. They are a lot smaller than traditional leasing companies, owning 10,000 vehicles compared to large ones that might have over 350,000 cars. 

By being smaller, it’ll mean they can’t negotiate discounts with manufacturers and since they aren’t owned by a retail bank, 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. 

Electric Car Scheme, for example, are not a leasing company nor a broker. Since they don’t have a direct relationship with leasing companies, they can’t charge a commission. So their fee comes out of charging double rent for the first 6 months, as well as an additional fee to the employer. 

Wevee and 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 administration fee to the employer for each lease taken out (typically around £10 per month) to cover the ongoing costs of managing the lease over the 24-36 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. 

In addition to that, 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 via a salary sacrifice scheme

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 third party for your home charger

An electric car home charger isn’t included in our package, but we will put you in touch with one of our partners who will install a charger at home for a discounted rate. 

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:

Tusker

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.

Features

  • Employees can access both combustion 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 offer a StopGap car while you wait for your new car.
  • 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:

  • Tusker monthly lease prices may be higher because they are a leasing company and offer “lifestyle protection”.
  • Tusker primarily works with companies with 1,000+ employees.
  • There is less of a focus on post-care and helping employees get set up with cars (based on Trustpilot reviews).

Who’s Tusker good for? Companies with 1,000+ employees that want to offer combustion cars and possibly a salary sacrifice scheme.

Octopus EV

Octopus is best known as an electricity and gas provider, but in 2018 they branched out to electric vehicles and the salary sacrifice scheme. 

Features

  • At home charger and installation is included in the lease cost.
  • 5,000 car miles included.
  • Employees can do test drive days – possibly only for larger companies
  • Employees are tied to Octopus’ own app, “Electric Juice”, which can include offers and discounts.
  • HR portal.
  • Offer Intelligent Octopus tariff from Octopus Energy is designed especially for electric car drivers – charge your car between midnight and 7 in the morning for a heavily discounted rate  (although non-Octopus customers can sign up for this as well).
  • 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

  • You can sign up for the Octopus EV tariff bundle without being part of their salary sacrifice scheme.
  • Lease prices are higher  because they are a leasing company that is considerably smaller than the market leaders and they have a higher cost of capital. 
  • Early termination only covers 10% of claims or ten cars – whichever is greatest.
  • 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

Who is Octopus EV good for? Employers and employees who want everything bundled together and include a charging solution and home energy tarriff.

Electric Car Scheme

Electric Car Scheme was started in 2021 with business contract hire leases, and launched a salary sacrifice scheme in January 2022

Features

  • Their early termination policy covers dismissal.
  • Not a broker or leasing company: they are an authorised representative of a third party broker
  • Maintenance, servicing, MOT, breakdown cover and tyre replacements are optional rather than automatically included.  
  • Electric charge point and installation are also optional.
  • Leases are 1, 2, 3, and 4 years.

Keep in mind

  • Electric car scheme customers will have to pay double rent for the first six or 12 months.
  • Their monthly lease prices may be higher because they have to go through two middle-men to get to the leasing company (their broker and the leasing company)
  • Since they do not own the relationship with the leasing company, they won’t have full responsibility over their regulatory conduct, systems and processes.

Who’s Electric Car Scheme good for?: Companies that have a staff base that can afford double-rentals for the first six months, and companies that want early termination cover for dismissal.

WeVee

WeVee is a car leasing company that offers electric cars via corporate leasing, car sharing as well as the salary sacrifice scheme. 

Features

  • Offer corporate leasing, corporate pool cars and car sharing.
  • Soon to be releasing features such as WeVee app, preloading with multiple years’ worth of prepaid energy and other features. 

Keep in mind

  • No employee portal.
  • Outsourced post-care to India
  • Not much post-care or educational content for employees.

Who is WeVee good for? Companies that are interested in business car leasing as well as salary sacrifice.

What to look out for when getting set up with a 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 scheme, there are a few things you want to look out for:

Clear communication

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:

  • Resignation,
  • Accidental death,
  • Parental leave,
  • Sick leave,
  • Redundancy.

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).

Look at 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 or check out our community, and we’ll make sure to respond to your queries.

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