Salary Sacrifice Car Scheme - Pros and Cons

hufc2002

Hi all

Im half way through a 4 year PCP and starting to think ahead of what to do next in terms of a new car.

My NHS employer operates a Salary Sacrifice Car scheme which at the point of me starting my current PCP I wasn't eligible for as I was fixed term. I am now permanent therefore would be eligible.

I have obtained quotes for various car's and the monthly cost's seem pretty competetive considering they are all inclusive of insurance, servicing, maintenance etc.

Does anyone here have any experience of obtaining a car through salary sacrifce?

What are the other advantages/disadvantages?

Cheers

Guest101

hufc2002 wrote: »

Hi all

Im half way through a 4 year PCP and starting to think ahead of what to do next in terms of a new car.

My NHS employer operates a Salary Sacrifice Car scheme which at the point of me starting my current PCP I wasn't eligible for as I was fixed term. I am now permanent therefore would be eligible.

I have obtained quotes for various car's and the monthly cost's seem pretty competetive considering they are all inclusive of insurance, servicing, maintenance etc.

Does anyone here have any experience of obtaining a car through salary sacrifce?

What are the other advantages/disadvantages?

Cheers

sre you doing more than 3,500 business miles per year?

hufc2002

No, I do very little business miles.

Guest101

hufc2002 wrote: »

No, I do very little business miles.

ah shame, you'd be entitled to reduced pricing then.

These can be worth it though, what kind of prices are you getting?

My friend claims (does over 3.5k business) a lease car and gets paid £6 a month to have it!

hufc2002

Does anyone else have any thoughts/experience of Salary Sacrifice Car schemes?

Cheers

InsideInsurance

Is it coming out of your gross or net salary?

If it comes out of your gross then its a company car and you will have BIK tax payments to pay on it and you need to factor it in.

If it comes out of your net salary then its a private car and you're just leveraging your employers buying power for pricing.

I've seen things work both ways, both are good but you need to understand which it is to determine the total cost of ownership and getting anything that isnt highly fuel/ emissions efficient on a company car scheme can lead to very high tax bills. A former colleague didnt realise and got hit badly by a massive tax bill that made the car massively more expensive than it'd have been to lease/PCP it privately.

scotsbob

Are you in the NHS pension scheme? This is a salary sacrifice scheme, the less salary you receive the less pension you get.

These are good schemes for employers because they pay less on the employers NI contributions and less to the pension scheme, that's why they promote them in such a persuasive manner.

Does the scheme require you to participate in group insurance, if it does and later on you own your own car, will your insurance company recognise no claims years in the group scheme?

Furthermore you need to calculate the total cost over the period and ask yourself what do you own at the end of it for all that money

I would see your union rep and get these questions answered, especially the pension one.

PeacefulWaters

scotsbob wrote: »

Are you in the NHS pension scheme? This is a salary sacrifice scheme, the less salary you receive the less pension you get.

Do you have any links to support this?

My understanding is that the base salary drives pension arrangements.

If you're contracted out it will make no difference to state pension.

I could be wrong, but I detect unsubstantiated scaremongering.

scotsbob

PeacefulWaters wrote: »

Do you have any links to support this?

My understanding is that the base salary drives pension arrangements.

If you're contracted out it will make no difference to state pension.

I could be wrong, but I detect unsubstantiated scaremongering.

Of course I can provide links to support what I say.

I initially thought you must be too lazy to do your own research but then I see that you have only been using the Internet since February so I am prepared to help a newbie.

If you type this into your web browser www.Google.co.uk you will be on a page known as a "search engine" You can then type in any query and you will get a list of pages where you should find an answer. Then you can do your own research.

You say you detect "unsubstantiated scaremongering" why on earth do you think I should indulge in that? What possible reasons do you think I would have? Your comment is uncalled for, pure surmise with no basis in fact.

http://staffbenefits.wiltshire.gov.uk/green-car-scheme/green-car-scheme-frequently-asked-questions.htm

scotsbob

hufc2002 wrote: »

What are the other advantages/disadvantages?

Cheers

The advice I offered you in my previous post has been called into question with the suggestion I have been scaring you. I don't know which authority you work for but this is from the last one I worked for and may help you.

http://staffbenefits.wiltshire.gov.uk/green-car-scheme/green-car-scheme-frequently-asked-questions.htm


You want to read the section headed

"I’m in the Local Government Pension Scheme (LGPS). What effect does this salary sacrifice have on my future pension?"

As I suggested in my previous post you should also discuss with your union rep.

PeacefulWaters

scotsbob wrote: »

Of course I can provide links to support what I say.

That's good.

I initially thought you must be too lazy to do your own research but then I see that you have only been using the Internet since February so I am prepared to help a newbie.

If you type this into your web browser www.Google.co.uk you will be on a page known as a "search engine" You can then type in any query and you will get a list of pages where you should find an answer. Then you can do your own research.

There really is no need to be arsey. I'm not affected personally, so why would I?

You say you detect "unsubstantiated scaremongering" why on earth do you think I should indulge in that?

Many on these pages do.

What possible reasons do you think I would have? Your comment is uncalled for, pure surmise with no basis in fact.

Given the link you've provided, it would appear not. I apologise for the offence caused. But I did issue an open invitation to refute the suggestion.

http://staffbenefits.wiltshire.gov.uk/green-car-scheme/green-car-scheme-frequently-asked-questions.htm

It is an intriguing way to put the scheme together. One wonders why they don't just calculate pension first and car cost second under the sacrifice of salary. Maybe there's an HMRC restriction but I'm not aware of it. Alternatively whoever designed what's meant to be a positive benefit just couldn't resist trying to save on the pensions bill.

Given the hefty increases in company car tax over the next few years I'd be cautious about this sort of scheme anyway as it's becoming a tax that far outweighs the value of the benefit.