Salary sacrifice car scheme

Muhren

There is a salary sacrifice car scheme at work that I am thining of signing up to and wanted to know what people thought of the idea.

I am currently traveling around 500 miles a week and have a car that is 9 years old and is starting to cost me a bit of money in repair costs. So I have been looking at the scheme and have seen a car that I like that will cost £275 a month over 3 years. There is no deposit required and all the maintenance, tax and breakdown cover are included so basically I just have to pay for petrol above the monthly £275.

If I sit at 65 mph on the motorway I can achieve around 46 mpg in my car. The stated mpg of the car I have been looking at is 88.3, I know that it won't achieve this but even if it is around 66 I will be making good savings on fuel costs.

What are peoples thoughts on taking up the scheme?

OddballJamie

Depending on the scheme you may also need insurance as well as petrol.

Check the actual MPG out on Honest John, don't take any notice of the quoted mpg figures.
http://www.honestjohn.co.uk/realmpg/

My partner works for the NHS and she looked into a similar scheme but decided against it as she would have had to top up her pension and the effect it could have on our mortgage or any future moving plans, as you technically will be earning less money.

Also look into the mileage limits as 25,000 miles is a lot so there may be an excess charge.

Compare to other lease deals from places like Ling Cars and compare with buying the car outright or a nearly new one.

OddballJamie

Just noticed you mentioned petrol, which petrol car are the companies quoting 88.3 mpg, that's impressive.

Muhren

OddballJamie wrote: »

Just noticed you mentioned petrol, which petrol car are the companies quoting 88.3 mpg, that's impressive.

Thanks for your reply it is the new Renualt Clio 1.5 diesel Eco. I have just checked the link you posted and the real mpg average is stated as 65.5.

The insurance is included in the £275. As for what you are saying regarding a mortgage I have just remortgaged on a 3 year deal so I guess I am okay on that front, well until I have to decide what I will have to do once the 3 years is up anyway. You put in your estimated annual mileage so that is inculded in the quote as well.

OddballJamie

The other thing to consider is if you plan on leaving the company within the agreement, as the one my partner looked at shot up loads.

I guess the price seems high on the Clio as it's a new model
I've just seen this on Ling Cars, probably too big for your needs
http://www.lingscars.com/Renault/Captur/1877514-1.5_dCi_%2890bhp%29_Dynamique_Media_Nav_Hatchback_5dr_1461cc-personal.html#models

OddballJamie

Actually it's the maintenance raising the price, 25k a year is gonna be a fair amount of tyres, services and other W&T items.

Strider590

Be careful, under UK employment law an employer cannot cut an employee's pay without their agreement (terms of contract). If you agree to this, you could have the car removed next year and be left on a lower salary.

I'm not saying that'll happen, or that your employer is that sort, but you need to be aware of your rights.
I personally would not risk it, not unless the benefits where blindingly beneficial.

Muhren

Yeah that is one thing that is concerning me is that I am being tied to the company for another 3 years. Having effectively signed a 6 year contract when I started, this finishes in September (they paid for my foundation degree and other training, which I would have to pay back if I left within 3 years of finishing).

The lease is through a 3rd party that our company leases all our vehicles off. I would be signing an agreement with them rather than my company so I can't see how they could revoke the car?

Strider590

Muhren wrote: »

Yeah that is one thing that is concerning me is that I am being tied to the company for another 3 years. Having effectively signed a 6 year contract when I started, this finishes in September (they paid for my foundation degree and other training, which I would have to pay back if I left within 3 years of finishing).

The lease is through a 3rd party that our company leases all our vehicles off. I would be signing an agreement with them rather than my company so I can't see how they could revoke the car?

It's not the car I was concerned about.... It's just that agreeing to less pay could put you in a tricky position in future. But it all depends on how the agreement takes shape.

scotsbob

If the insurance is included as part of a group scheme then if you leave the scheme in the future you will not be able to have any no claims bonus. Your insurance will most likely start at zero again.

After you have paid out £9900 ( 36 times £275) you will have nothing at the end of that period, you hand the car back.

redmike123

Who owns the car at the end of the agreement ? I think it might be your employer.