You’ll most likely be aware that there are a number of different ways in which you can acquire an electric car (EV), from leasing to PCP deals. If you’re considering leasing through a salary sacrifice scheme, you may be wondering what the benefits and potential limitations could be, so here is a brief summary of the pros and cons of this type of leasing.
If you’re curious about whether or not leasing is the right fit for you, why not check out our article on the differences between leasing and owning an electric car so you can be confident you’re making the best choice.
It’s More Affordable
One of the best parts of leasing with a salary sacrifice scheme is how much cheaper it makes leasing. In fact, with a lease from loveelectric, you could nearly halve your monthly cost when compared to being in a PCP or Hire Purchase contract or leasing without a salary sacrifice. This means you’ll have access to a wider range of vehicles to choose from that are within your price range, so you won’t have to compromise on price or quality. At loveelectric, we offer a broad variety of electric vehicles, from Porsche Taycans to Nissan Leafs, so why not browse our range and see what you could afford today?
- You’ll Save on Taxes
If you’re wondering why it’s so much more affordable and how this is even possible, the answer is tax savings! As an individual who wants to lease a vehicle through the loveelectric salary sacrifice scheme, you won’t need to pay for VAT on your vehicle, your income tax and National Insurance Contributions will be lowered (as you are technically forgoing a portion of your salary in return for the benefit of your new EV), If you’d like to learn more about how taxes work with our scheme, check out our post on tax benefits.
It’s not just the individual that can save on taxes, as firms will save money on employees who wish to participate in this HMRC-approved salary sacrifice plan! If your business is signed up to the loveelectric salary sacrifice scheme, you can reclaim back 10% of the VAT cost from the government and due to the employees earning slightly less (in exchange for the electric car) the amount of NIC the employer must pay will also decrease, which is yet another cost saving.
Cheaper to Run
You may be aware (perhaps painfully so) of how high gas prices are currently due to various factors at play at this moment in time. Even before these unprecedented times, charging an EV was cheaper than filling your internal combustion engine (ICE) vehicle with fuel, and that principle hasn’t changed.
As an example, let’s compare the most popular ICE car in the UK in 2021, the Vauxhall Corsa, to its electric equivalent, the Vauxhall Corsa E. According to Compare The Market, the estimated yearly cost for fuel is £588 for the Vauxhall Corsa and £325 for the Vauxhall Corsa E, meaning you could save 44.7% on fuel each year if you go for the Corsa E.
Typically, the average cost of charging is roughly 28p per kWh when using a home charger, and Pod Point estimates you could get a full charge for around £15.10. If you want to save even more on charging and you’re willing to do some research, why not compare different energy providers and tariffs to ensure you’re getting the best deal. Although this process isn’t quite as simple as comparing a standard energy tariff, if you want to prioritise saving, this could be a valuable tool. If you’re interested, we recommend this resource from Money Savings Expert to get you started.
Additionally, you can often find charging spots at supermarkets where you can charge your vehicle for free, and if you live in Scotland you can access 2000+ charging points across Scotland where you can charge your vehicle for free, all you need to do is download the ChargePlace Scotland app and pay a one-off membership fee of £10 to get started.
If you’re a business and you’re wondering how going electric could save you on fuel reimbursements for your employees, you’ll be happy to learn that while HMRC allows businesses to pay staff 45p per mile for internal combustion engine (ICE) cars, but it's only 5p per mile for electric cars. So, this means that if an employee drove 10,000 business miles in a year, this would save the employer £4000 on the cost of travel for that employee.
Leasing can make having a car significantly more affordable, but the savings don’t stop there! When you lease with loveelectric, there are no deposits or upfront payments required and there aren’t any delivery fees. As mentioned above, the only cost that’s required is the small portion taken directly from your salary that goes towards your monthly payment. If you’d like a more in-depth explanation on how salary sacrifice schemes work, check out our article on how it works.
Whether you’ve been looking to find a way to reduce your carbon footprint or if you’re keen to improve your company’s CSR and meet sustainability targets, signing up for an electric car salary sacrifice scheme could be a great way to show your commitment towards a greener future.
When compared to ICE vehicles, EVs emit significantly less pollution during their entire lifespans, especially when charged with electricity derived from renewable energy sources. Despite the misconception that going electric doesn't make much of an environmental difference, when including everything from production, driving, and charging, they are far better for the environment. Additionally, as the sale of internal combustion engine (ICE) vehicles are to be banned by 2030 and with larger cities like London and Edinburgh implementing congestion charges for ICE vehicles, why not adapt now and future proof for both your business and your employees?
Increase in Company Morale and Staff Retention
If you’re looking for a way to improve company morale and increase your staff retention, a salary sacrifice scheme is the perfect choice! Signing up for an EV salary sacrifice scheme could guarantee that your employees feel valued and incentivised to stay at your firm, and as EV salary sacrifice plans are still relatively new, your business could stand out by providing a benefit like access to a wide selection of electric vehicles at more reasonable prices. We all know that employee turnover can be costly, so doing everything you can to assure employee happiness may be a very cost-effective way of incentivising your staff to stay loyal to the firm.
Not only is a salary sacrifice scheme a great way to increase staff retention, it could also be a great benefit to pitch in the recruitment process. Being able to offer the opportunity for that star candidate to get their dream car at a much more affordable price could be an incredibly attractive benefit. At loveelectric, there’s a great range of vehicles to choose from, so why not have a quick browse of our range. Signing up to the loveelectric salary sacrifice scheme is completely free, so why not increase your staff retention and employee morale in one go?
Breakdown, Maintenance and Servicing is Covered
If you join the loveelectric salary sacrifice scheme, your breakdown, maintenance, and service costs are all covered. Plus, you'll get 24/7 breakdown help, so you can enjoy your new electric car knowing we've got your back!
It’s More Flexible
A salary sacrifice lease provides considerably more freedom when compared to a PCP or Hire Purchase contract, where you won’t have the option to upgrade to a new car every couple of years, while being trapped paying back a bank loan. Leasing allows for far more freedom, and when leasing through a salary sacrifice scheme, you could get brand new luxury vehicles at a much lower cost. If you want to learn more about the different ways you could get an electric car and how they compare, click here to read our article where we compare leasing and owning a car to see what would suit you best.
Signing up is simple
If you’re an employer and you’re wondering how much administrative work is required to join this scheme, don’t worry, signing up is simple and straightforward! You start by submitting a signed application (which you'll receive when you submit an enquiry through our website), which takes about 5-10 minutes and can be completed entirely online.
After that, we'll email you a final supplier agreement to e-sign, and you'll receive login information for yourself and your staff to use our webapp to explore our range of vehicles available and obtain real-time quotes. Once your staff have chosen a car and a lease agreement, you just need to authorise it by clicking a button. That's all there is to it!
Only Available if Your Employer is Signed Up
As this scheme is a salary sacrifice scheme, you’ll need to have your employer sign up before you can lease a vehicle. Our general guideline to know whether or not your business may be eligible is that it must be profitable and have been in business for more than two years, but we do sometimes make exceptions! If you're interested, sign up here to see if our salary sacrifice scheme will work for your company!
If you’d like to learn more about the requirements for both your business as well as personally to sign up to our scheme, we recommend checking out this article where we share the answers to some of our most frequently asked questions.
No option to purchase car after lease
The loveelectric salary sacrifice scheme does not offer the option to purchase the vehicle at the end of the contract. However, this might not actually be a con for you depending on your circumstances, as when you’re signed up to this scheme, you won’t be affected by the depreciation of the value of the car after the lease ends. Instead you’re free to sign another lease and get another brand new car at a more affordable price.
Just as with any other form of leasing, when leasing through a salary sacrifice scheme, be aware that your mileage will be limited. Of course, you may raise your mileage and pay a little more every month, or you can pay a fee if you go over, but this is something to take into consideration.
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