Your complete guide to EV salary sacrifice procurement

Understanding EV Salary Sacrifice

Before diving into the procurement process, it's important to understand what you're actually offering your employees.

An electric car salary sacrifice scheme allows your employees to trade a small portion of their pre-tax salary for an EV – saving them 30-60% on their lease. With an ultra-low Benefit in Kind rate for EVs of just 2%, combined with lower Income Tax and reduced National Insurance contributions, your employees can cut costs - not corners. The best part? It's at zero cost to your company.

Why offer EV Salary Sacrifice?

Unlock EV Savings

By offering salary sacrifice, you're giving your employees access to affordable electric cars they might not otherwise be able to afford. The significant tax advantages make EVs genuinely accessible across your workforce.

Reach your sustainability goals

Electric vehicles are a tangible way to demonstrate your commitment to environmental responsibility. As your employees transition to EVs, your company's carbon footprint reduces alongside your team's.

Boost employee happiness

Quality benefits matter to employees. An EV salary sacrifice scheme is a high-value perk that employees genuinely appreciate and use, contributing to overall job satisfaction and wellbeing.

Employee benefits, simplified

Unlike some employee benefits that require complex administration, EV salary sacrifice can be streamlined and straightforward when you work with the right provider.

Be recognised for what you do

Offering progressive, environmentally conscious benefits helps position your company as a forward-thinking employer – valuable for both recruitment and retention.

What to look for in a provider

Your ideal EV salary sacrifice provider should be more than just a business contract; they should be a partner in your company's journey towards sustainability and employee happiness. Here's what to keep in mind when evaluating your options.

Low risk to your business

Choose a provider with transparent Early Termination Protection (ETP). Be wary of those inflating early lease rates to cover ETP overheads, as this can drastically deter employee participation. Hidden costs buried in lease rates defeat the purpose of offering an attractive benefit.

Value vs. cost

It's not just about finding the cheapest option. Go for cost-effective EV schemes enriched with superior customer care and effective risk management. A slightly higher upfront cost that includes comprehensive support can save you significant headaches down the line.

Access to all EVs on the market

Your employees have different needs, preferences, and budgets. Select a provider that ensures access to a wide variety of EVs for your whole team, including access to new and used EVs and frequent special offers. Limited choice means limited appeal.

Dedicated EV expertise

Salary sacrifice is a complex product. Make sure you choose a provider with a team of experts who live and breathe salary sacrifice every day. You need partners who can answer technical questions, guide employees through the process, and handle edge cases with confidence.

Industry experience

Select a provider with proven industry experience, ideally serving a large and diverse corporate customer base. Established providers have encountered and solved the problems you haven't even thought of yet.

Scalable solutions

Your business isn't static, so your employee benefits shouldn't be either. Opt for a provider offering an adaptable, cost-effective scheme that grows with your business. Whether you have 50 or 5,000 employees, the scheme should work efficiently.

Understanding and managing risk

At the heart of introducing an EV salary sacrifice scheme is balancing financial risk with employee rewards. This is where Early Termination Protection becomes crucial.

What is Early Termination Protection?

All reputable providers will offer Early Termination Protection (ETP) to support you and your employees in managing any potential risk – empowering you to prioritise your team's happiness and success. ETP shields against unforeseen lease terminations, providing peace of mind amidst unexpected circumstances and ensuring your business remains agile and resilient.

Evaluating ETP offerings

When comparing providers, prioritise those offering a clear, transparent ETP plan that suits your company's requirements. Ensure you scrutinise promises of 'zero risk' or 'complete risk protection', as all protection services entail terms, conditions and exclusions.

The ETP comparison checklist

Unsure where to start when discussing ETP with potential electric car salary sacrifice providers? Use this handy checklist to kick off your conversations and compare providers side by side.

Does the provider's ETP cover:

• Dismissal – What are the terms? (For example: after 3 months of employment)
• Parental leave – How long can employees take rent-free? (For example: after 6 months, the employee can take up to 12 months completely rent-free)
• Redundancy – When does coverage begin? (For example: after 6 months)
• Long-term sick leave – Is there coverage from day one?
• Enhanced GAP protection – Is this included, and from when?
• Limits on terminations – Are there annual caps, or is it unlimited?

This checklist will help you create a clear comparison between providers and understand exactly what protection you're getting.

The importance of a robust early returns process

Beyond ETP, a strong early returns process can make all the difference in managing risk and keeping employees happy. The best providers offer multiple routes for employees who need to end their lease early.

An effective two-step process

A comprehensive early returns process should offer maximum protection from day one through two key elements:

Step 1: A Used EV marketplace

The first line of defence should be a used EV marketplace that empowers your employees with options:

• Transfer the lease to their new company if they change jobs
• Switch to a Personal Contract Hire
• Purchase the EV outright
• Reassign the lease to a colleague within their current company
• Transfer the lease to an employee of any other company within the provider's community

This flexibility means many early terminations can be resolved without any cost to your business or the employee.

Step 2: Comprehensive ETP Coverage

When marketplace options aren't viable, comprehensive ETP acts as your safety net, providing complete peace of mind for your organisation.

What sets the best providers apart

When you've narrowed down your options, look for these distinguishing features that separate good providers from great ones.

Unrivalled early returns process

The best providers safeguard your company against unexpected charges with uncapped returns, giving you genuine peace of mind rather than fine-print limitations.

No nasty surprises

You should be assured of price transparency, no hidden costs, and genuine savings on electric vehicles. Everything should be clear from the outset.

A team you'll love working with

Look for a team that always goes the extra mile. From sourcing available stock to continuously innovating their offering, they should be there for you every step of the way.

Ready to compare providers?

Armed with this knowledge, you're ready to begin evaluating EV salary sacrifice providers in earnest. Use the criteria outlined in this guide to structure your conversations, compare offerings, and ultimately choose the partner that's right for your business.

Remember: your ideal provider should align with your company's vision for sustainability and employee happiness whilst offering transparent terms, comprehensive protection, and genuine expertise in EV salary sacrifice.

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