company electric car salary sacrifice help

[Pj1972]

Hi all
The company i worked for has started a salary sacrifice scheme for electric cars , just wondering what anyone thoughts are . Considering this. I only do about 5k miles a year. Currently own a 2020 Mercedes unleaded, I bought 2 years ago and its dropped from £25k to around £18k now.

Example of company car.

Toyota bz4x over 24 months

Basic Monthly Cost £487.11pm
Gross Salary Sacrifice £609.41pm (includes insurance polices)
Tax saving- £215.57pm
Net cost to you £393.84pm

Benefits (from lease company)
Income tax and National Insurance savings on low-emission vehicles
No deposit or credit check
Motor insurance included and price fixed for the lease term
Maintenance, tyres and road tax included
Breakdown Cover
Accident management
Early termination protection, for certain circumstances

Comes out at £9432 over 24months. Current car has lost about £7k in depreciation during the same period. Pay about £450 insurance. Maintenance guess £400 a year?
Pretty much works out the same loss over 24months , apart from i get a brand new car not a 2 year old used. Will have to add charger at home so thats £1k. Dont really do long journeys anymore so not too fussed about electric car range anxiety.

Any thoughts? Worth it?

Thanks

[Onetom]

Pj1972 said:

Hi all
The company i worked for has started a salary sacrifice scheme for electric cars , just wondering what anyone thoughts are . Considering this. I only do about 5k miles a year. Currently own a 2020 Mercedes unleaded, I bought 2 years ago and its dropped from £25k to around £18k now.

Example of company car.

Toyota bz4x over 24 months

Basic Monthly Cost £487.11pm
Gross Salary Sacrifice £609.41pm (includes insurance polices)
Tax saving- £215.57pm
Net cost to you £393.84pm

Benefits (from lease company)
Income tax and National Insurance savings on low-emission vehicles
No deposit or credit check
Motor insurance included and price fixed for the lease term
Maintenance, tyres and road tax included
Breakdown Cover
Accident management
Early termination protection, for certain circumstances

Comes out at £9432 over 24months. Current car has lost about £7k in depreciation during the same period. Pay about £450 insurance. Maintenance guess £400 a year?
Pretty much works out the same loss over 24months , apart from i get a brand new car not a 2 year old used. Will have to add charger at home so thats £1k. Dont really do long journeys anymore so not too fussed about electric car range anxiety.

Any thoughts? Worth it?

Thanks

It seems sensible in principle.

If you’re only doing 5k miles a year you could probably save £1k and start with a wall charger. I have a small electric car and do more miles than you and just plug it in when it’s not being used. However we do have a second non-electric car so i guess that’s a factor.

The maintenance costs for an electric car are very low at your mileage. First year service for my e2008 was £80, second year is £200. You shouldn’t need anything else in that time period under 10k total miles. So the maintenance, tyres and road tax are all pennies anyhow.

You also don’t seem to have factored in company car tax? Or am I missing it? It is very low for EVs but not zero, and is increasing over the next few years.

What would I think about in your shoes-

How likely are you to change job in the next 2 years and thus have to source a car at short notice, and does that pose an issue? Do you pay a fine if you hand it back because you have decided to change job?

If it costs the same is it worth bothering? EVs are fine but they are also quite boring to drive, whether that matters to you again is personal.

Do the calculation again with company car tax and with the increases over the next few years.

Otherwise, salary sacrifice is very popular because it offers fixed price motoring in a brand new car with no impact on your credit profile (other than essentially a lower salary into your bank.)

[duff]

There is a long thread in the EV section on SS schemes that’s worth a look through. Some things to consider :

Possible reduced Pension contributions on some schemes

Your reduced taxable income may be a good for things like Child Benefit but possibly not for mortgage affordability etc.

The money you have tied up in your current car could be earning around 5% if you own that outright.

[Pj1972]

Onetom said:

It seems sensible in principle.

If you’re only doing 5k miles a year you could probably save £1k and start with a wall charger. I have a small electric car and do more miles than you and just plug it in when it’s not being used. However we do have a second non-electric car so i guess that’s a factor.

The maintenance costs for an electric car are very low at your mileage. First year service for my e2008 was £80, second year is £200. You shouldn’t need anything else in that time period under 10k total miles. So the maintenance, tyres and road tax are all pennies anyhow.

You also don’t seem to have factored in company car tax? Or am I missing it? It is very low for EVs but not zero, and is increasing over the next few years.

What would I think about in your shoes-

How likely are you to change job in the next 2 years and thus have to source a car at short notice, and does that pose an issue? Do you pay a fine if you hand it back because you have decided to change job?

If it costs the same is it worth bothering? EVs are fine but they are also quite boring to drive, whether that matters to you again is personal.

Do the calculation again with company car tax and with the increases over the next few years.

Otherwise, salary sacrifice is very popular because it offers fixed price motoring in a brand new car with no impact on your credit profile (other than essentially a lower salary into your bank.)

Thanks , lots of helpful info there .

I think it’s coming down to I really need a new car , never had brand new as I always buy a few years old.
And I do like the comfort of owning outright rather than knowing each month a chunk of cash is going out for the next few years.
Something to think about , thanks