Electric car salary sacrifice scheme - a good idea or not HELP!

shaz4473

Currently I do not have a car as have been working from home and sold my car which I had been intending changing last year anyway.

My work place has just introduced an electric salary sacrifice scheme and I have no knowledge of leasing a car or having a company car as have always bought them privately before and owned outright.

My thought was that it would be a good idea as I was unsure about what car to purchase this year as I think technology will move a lot and the market will change drastically in the next few years and usually I keep a car 7-10 years.  If I went with the scheme I would get an electric car for 3 years and perhaps another 3 or just purchase a car outright in 3 years time.

I priced up a car with my specific details and it came in at £338 per month, the real cost to me.  This would include insurance and maintenance.  Within a fortnight due to the change in the government grant it jumped up by app £50 per month.  Ok this was acceptable.  Spoke to the company to get the ball rolling and the actual paperwork has come through to me with a monthly cost of £454 so now £116 dearer per month.  Having read the paperwork it seems that even if I had ordered the car in the 1st instance I would have seen these price increases anyway as it states that any price increase can be added up to the car being delivered.  Can anyone advise if this is normal procedure with a lease? 

This is making me quite unsure about the whole thing as I am worried that there will be more increases as the wait time could be around 16 weeks.  

Can anyone share their experience of these schemes good or bad?

Another offer with the scheme is that you get a home charger but then this will be one chosen by the company and will be tethered.  Can anyone advise on whether tethered or non tethered chargers would be better?

Lastly, has anyone managed to strike a better deal with their lease company after having been given figures??

thank you for any advice received

Bluebell1000

No experience about negotiating with a lease company, but we have a tethered charger and it's definitely easier. Ours is on a 4 year lease through salary sacrifice and we have been happy with it.

Grumpy_chap

shaz4473 said:

Lastly, has anyone managed to strike a better deal with their lease company after having been given figures??

Are you actually negotiating with the lease company, or simply being provided with information via your employer on the monthly rates for specific vehicle options?

If the latter, then the employer has probably done whatever negotiation there is an got some percentage reduced from the regular rates that the lease company would offer.  In that case, you need to take the figure quoted and accept it as it is, then compare the cost to you through the salary sacrifice scheme versus the cost to you through any other broker.

One way to get the best price on lease vehicles, which is not "negotiating" as such, is to ask which vehicles have best rates that particular week and select from that choice (often "stock" vehicles, which eliminates the issue around price changes from order to delivery).  Rates for lease vehicles can vary more rapidly than best discounted price when buying a car outright.  If you are very particular about specification, option, colour, trim, etc. then the lowest price may not be available to you.

shaz4473

I am dealing directly with the lease company - it is through Octopus Energy.    Yes I am being very specific in my choices with colour, trim etc and the car is going to be a build car rather than in stock. 

facade

One thing no-one mentions with salary sacrifice- by reducing your gross pay, it will affect a pension based on gross pay, so be careful.

Grumpy_chap

shaz4473 said:

I am dealing directly with the lease company

Are you actually dealing "fully" with the lease company? 
Is it possible that the deals in so far as any lease rates and discounts etc may apply have all been pre-negotiated by the employer and you are simply now dealing with an administrator who enters your choices into a spreadsheet or database and provides you with the answer that the computer spiels out?

All you can do is take the "cost-to-you" of the vehicle through the salary sacrifice scheme and then the "cost-to-you" of acquiring the vehicle in the open market and decide which route is most appropriate for you.

As just mentioned, beware of any impact to pension.  Also, take care to understand what happens if you leave the employer during the lease period.

shaz4473

Thank you all very much for the input here, especially about the impact on my pension which I had totally forgotten to think about.

Munro_Cottage

I recently received a salary sacrifice car and then found out I can only claim 5p per mile for business use as it is classified as a company car rather than 45p. 

Brie

facade said:

One thing no-one mentions with salary sacrifice- by reducing your gross pay, it will affect a pension based on gross pay, so be careful.

I think this is incorrect as pension is based on one's actual salary not after deductions for whatever reason.  

As for getting an EV via a work scheme - I decided against as I was unable to get a proper calculation of the full cost to me.  There was little difference between a car I would get thru the scheme and buying it myself but the lease company couldn't tell me what the final amount would be that I would be charged at the end of the lease.  On that basis I decided it wasn't a viable option.

cpbackhouse

On my wife's NHS scheme it definitely affects pension contributions. 

Other schemes may be different but for her Salary Sacrifice is exactly that .... its as if your salary has been reduced by the amount that you are now paying for the car. Thats how she gets the benefit of not paying income tax etc on that amount. 

What we did notice though is that the "base lease" prices charged by the company our trust used were definitely inflated compared to those available to us leasing privately. In the end the overall saving and the inclusion of insurance and maintenance swung it for us in favour of the scheme. 

Not sure it will be the same next time around though as I'm sure the government will increase the rate of company car tax for electric cars.