As the 2035 deadline for the zero-emissions vehicle transition approaches, are becoming increasingly popular. Salary sacrifice schemes offer a great way for employers to help employees lower the cost of leasing an electric vehicle by allowing them to lease an EV through their workplace and regular salary. Read on to find out all the details and how you could benefit from great savings on an electric car.
Why opt for an electric car?
Now is the perfect time to consider an electric vehicle and make the change ahead of the ban on new petrol and diesel sales.
Continuous development & better infrastructure
EVs not only help to reduce environmental impact, but their technology advancements have significantly improved resulting in better battery capacity. The UK's charging facilities are continuously expanding with 64,775 EV charging points available across the UK as of June 2024.
Technology advancements
Most EVs offer advanced features including mobile apps, pre-warming, and route planning, not forgetting their very modern look & feel.
More used EVs are available in the market
While high costs can be a barrier due to the modern technology and battery technology used, choosing a used EV can help with this.
Schemes can help make EVs more affordable
Furthermore, salary sacrifice schemes through your workplace can make leasing the latest EVs more affordable, ensuring you get the best features and maximum battery capacity. This way, you can enjoy the best features and maximum battery capacity without breaking the bank.
What is a Salary Sacrifice Scheme?
A salary sacrifice scheme is an employee-based scheme available for employees with a range of benefits. This arrangement can help you save on taxes and may make the benefits offered more affordable too.
With a salary sacrifice scheme, you can choose from a range of benefits offered by your employer, allowing you to tailor to what suits you best. These benefits could include health plans, childcare vouchers, cycle-to-work schemes, car parking, laptops & mobiles or company cars. These benefits make accessing valuable services more cost-effective.
How Does a Salary Sacrifice Scheme Work?
When you opt for any of the benefits like a company car through a salary sacrifice scheme, the cost is deducted directly from your monthly wages before tax is applied. This reduces your national insurance contributions as well as your income tax, meaning you pay less taxes on your salary compared to if you paid for the benefit out of your pocket.
This approach not only benefits you but can also benefit your employer as they may pay lower rates on things like national insurance contributions.
Additionally, many find it easier to manage and budget payments this way as this is deducted before receiving your monthly salary, leaving you more money compared to paying for the benefit yourself.
What are Electric Car salary sacrifice schemes?
With the average price of an EV around £48,000, these schemes can make electric cars much more affordable with large savings. Employers partner with specialist leasing companies to provide a range of pre-approved EVs. These companies can sometimes include insurance, breakdown cover and servicing costs too, although you'll usually have to pay fuel costs and any damage to your vehicle throughout the lease period.
Leasing agreements usually last between 2 to 4 years, after which you can:
- Return the car
- Exchange it for a new model,
- Purchase it by paying the remaining balance.
When considering an EV be aware of the charging needs before purchasing. Determine whether you'll charge at work, need a home charging point, or rely on public charging stations. This ensures you can fully benefit from the convenience and cost saving that comes with an electric vehicle.
Why Choose an EV Salary Sacrifice Scheme?
Investing in an EV salary sacrifice scheme is an excellent way to start your journey with electric vehicles, supported by your employer.
But why should you invest in an EV salary sacrifice scheme? These schemes offer significant savings compared to buying or leasing privately, as you'll pay less tax and lower national insurance contributions. Once set up, your employer will manage the scheme, simplifying the process for you.
However, it is important to research to ensure you choose the right vehicle, as you’ll be entering into a lease agreement which you won't be able to switch easily. If your car is for family use, ensure you pick an EV with adequate space and features for your and your family’s needs.
We stock a great range of new and used EVs with impressive driving ranges, superior comfort and stylish looks. Take a look at our range of EVs to see which is right for you or find out more on our blog.