Work Car Salary Sacrifice Scheme

chrisb1357

Hi all,


My work is thinking at starting a Car Salary Sacrifice Scheme and have asked people if they are interested which a lot are so they are going to the next step of getting the lease company to answer questions about the scheme.


Is there any pro's and con's to joining such scheme etc and what questions would I be best to ask the company / lease company when they are onsite to talk about the scheme.


Chris

DUTR

What the cons are for a start off, my bro's place had a car scheme but then after a time the rules changed, no two/three door, low emissions, basically just standardish cars that ordinarily a lot of them wouldn't have bothered with if they were choosing their own car with their own money.

chrisb1357

We would be looking for a small city car if we did go down the route but I would need to have a long hard think about it first

Petree

I run the one for my firm, basically you get two sorts.

1) company car driver programme, where they offer you cash and then you lease the car and then it gets into strange (but valid) tax rules - ECO etc. - I'm assuming since you want a little city car this isn't you.

2) a scheme offered to everyone where for a fixed cost you get a car with tyres, servicing, tax disc, insurance etc all for one price (much the same as Peugeot just add fuel - but with an additional tax saving)

Benefits
Discount off the list price which your employer/the provider has (e.g. 20%+ off the volume brands)
Tax Saving - 30% of the cost off (some back in BIK so look at cheap & 100g CO2 models for the best saving)
Easy one off cost for no hassle motoring
No downpayment so you sell your current car and pop the money in the bank earning a whopping 3% interest :money:

Negatives
If you quit during the term you will likely have some forfeit payment (2/3/4x the normal payment) - you'll also need to go buy a car!
When the car is returned it will need to meet BVRLA wear and tear guidelines, as with any lease, which tend to be more strict than if your used to just buying a car and accept the odd car park dink as a fact of life.

I tell my lot to add all their costs for insurance, tax, tyres, servicing etc and then divide by 24/36 and then add this to the amount for getting the car from a high street offer with no deposit (lingscars is a good bet) to see which is cheaper.

Most of the time SSac comes out best, but its always going to be more than buying something 2-3 years old but thats the cost for a new reg plate and no hassle motoring.

Good luck

chrisb1357

Hi


Its Option 2 that they are looking at offering to all staff. Not had much info yet so I am building up questions to ask them


Chris

Petree wrote: »

I run the one for my firm, basically you get two sorts.

1) company car driver programme, where they offer you cash and then you lease the car and then it gets into strange (but valid) tax rules - ECO etc. - I'm assuming since you want a little city car this isn't you.

2) a scheme offered to everyone where for a fixed cost you get a car with tyres, servicing, tax disc, insurance etc all for one price (much the same as Peugeot just add fuel - but with an additional tax saving)

Benefits
Discount off the list price which your employer/the provider has (e.g. 20%+ off the volume brands)
Tax Saving - 30% of the cost off (some back in BIK so look at cheap & 100g CO2 models for the best saving)
Easy one off cost for no hassle motoring
No downpayment so you sell your current car and pop the money in the bank earning a whopping 3% interest :money:

Negatives
If you quit during the term you will likely have some forfeit payment (2/3/4x the normal payment) - you'll also need to go buy a car!
When the car is returned it will need to meet BVRLA wear and tear guidelines, as with any lease, which tend to be more strict than if your used to just buying a car and accept the odd car park dink as a fact of life.

I tell my lot to add all their costs for insurance, tax, tyres, servicing etc and then divide by 24/36 and then add this to the amount for getting the car from a high street offer with no deposit (lingscars is a good bet) to see which is cheaper.

Most of the time SSac comes out best, but its always going to be more than buying something 2-3 years old but thats the cost for a new reg plate and no hassle motoring.

Good luck

chrisb1357

Many thanks for the info regarding Work Car Salary Sacrifice Scheme on my post. I am just looking at all the pro's and con's before I do anything and before a jump into anything. A lot of people at work have not looked into it much and think they are just going for any car they see where I am not.

I have been looking at this site to get the best sort of idea on the cars Co2 and BIK rating http://www.nextgreencar.com/


And then using http://fleetworld.co.uk/newcar/compa...ct.cfm?clk=434 and http://fleetworld.co.uk/taxtools/sal...icientDynamics


So do I just pay BIK on the car and my NIC stays the same

misterbarlow

ive gone for one with my company, and its actually coming in the morning.. yay!!! Been waiting since July since I ordered it...

as someone posted above about low spec models, with mine I could customise it to my own spec just like on a dealer site, and it added to the monthly cost, ie adding privacy glass adds £4.55pm, adding parking sensor adds £2.66pm, etc...
I was limited to 120g/km but other than that I could pick any make, model, engine, 3/4/5 door etc..

for us its a no brainer though..
our car was a 1.8 petrol, 11yrs old, did about 20mpg, was paid for, but when we add up insurance/tax/tyres/service/repairs/maintenance/mot, and what its cost to pass the last 3 mots, plus the fuel we use from a 1.8petrol to the new 1.6tdci, currently about £200pm we put in, hoping to half that with a diesel that hopefully will get around 50mpg???

So we should if anything be slightly better off per month, with the added bonus of hassle free motoring as its all in, insurance, tax, service, tyres and breakdown....
plus we just flogged ours on ebay for a few hundred, so thats christmas sorted..

the only downsides I found so far, is the insurance comes with a £350 excess, the return fair wear and tear policy is a bit harsh.. ie if alloys are kerbed at all they charge for new wheel... (ouch thats four new wheels already the way my wife parks..., and we have a 10k per year mileage limit...

Petree

Basically you're giving up (sacrificing) salary to pay for it.

So say you earn £25k and pay tax at 20% and NI at 11% (simplified i know).

You get a car which costs you £5000 a year (£416 a month), so you now only earn £20k and thus pay taxes of 31% (20+11) on this smaller amount.

Before = £7750 to HMRC
Now = £6221 to HMRC
so you've saved £1550 which pays 3.72 months of the payments

But HMRC won't let you have that, so yes you then get charged for BIK, lets say you go for a FIAT 500 twin air manual which costs £11,995. Its very low emissions (92 grams) so it will cost per year.

2013/14 -£11995 x 10% = £1195, then x 20% (your tax rate) = £239
2014/15 - that becomes 11% so £263
2015/16 = 13% so £311

As you can see you're still something like £1200-1300 a year better off (1550-239)

chrisb1357

What happens in your work place if you was to leave or get made redundant during the time of the lease

Chris

misterbarlow wrote: »

ive gone for one with my company, and its actually coming in the morning.. yay!!! Been waiting since July since I ordered it...

as someone posted above about low spec models, with mine I could customise it to my own spec just like on a dealer site, and it added to the monthly cost, ie adding privacy glass adds £4.55pm, adding parking sensor adds £2.66pm, etc...
I was limited to 120g/km but other than that I could pick any make, model, engine, 3/4/5 door etc..

for us its a no brainer though..
our car was a 1.8 petrol, 11yrs old, did about 20mpg, was paid for, but when we add up insurance/tax/tyres/service/repairs/maintenance/mot, and what its cost to pass the last 3 mots, plus the fuel we use from a 1.8petrol to the new 1.6tdci, currently about £200pm we put in, hoping to half that with a diesel that hopefully will get around 50mpg???

So we should if anything be slightly better off per month, with the added bonus of hassle free motoring as its all in, insurance, tax, service, tyres and breakdown....
plus we just flogged ours on ebay for a few hundred, so thats christmas sorted..

the only downsides I found so far, is the insurance comes with a £350 excess, the return fair wear and tear policy is a bit harsh.. ie if alloys are kerbed at all they charge for new wheel... (ouch thats four new wheels already the way my wife parks..., and we have a 10k per year mileage limit...

Petree

With us, you quit = you pay 3x the payment, collection charges and any damage.

We make you redundant = we 'eat' that cost

These rules are set by the company and the provider so you'll need to ask the provider/your employer what they have agreed, it could be no penalty or it could be 6 months in year 1, 3 in year 2 etc.

chrisb1357

Hi


We had the meeting the other day regarding our scheme my work is thinking of starting as well as a meeting with the lease company. In the meeting it was brought up that if there was total loss through accident, fire or theft of the vehicle we would have to pay any shortfall between the motor insurer's settlement figure and the lease agreement termination charge which we was told could be a lot.


They said we cannot take GAP cover out as the car will be in works name?


Have you had this problem?


Chris