Electric Car Salary Sacrifice - Worth It vs Second Hand Traditional? 1 September 2022 at 7:37PM in Motoring 12 replies 765 views

Shrub101

Hi,

I need to trade in my old Skoda Superb Diesel as the ULEZ zone may be extending to the end of my street.

Everyone I know keeps telling me how great buying a new electric car on salary sacrifice is, and how it saves so much money, but when I run the numbers it seems vastly more money than buying an equivalent second-hand Euro 5 compliant 4yr old Diesel / Petrol. Even when I adjust for fuel cost, insurance, tax and depreciation my numbers tell me that the electric car is costing me £12.5k more over a 3yr time period.

So what am I missing everyone? Is it just that friends and family are used to leasing/paying interest on their cars and therefore it feels better to them than buying outright?

Help me understand and to justify this to my wife who thinks my numbers must be wrong!

Thanks all,

Jon
------------------------------
My rough numbers:

Electric Car (Skoda Enyaq iV Estate 82kWh 150kW Slpn+ 80 Auto): ~£650 per month or £23,400 over 36 months. (based on a quote from Zennith our scheme provider)
Fuel Cost: £5 per week or £720 over 36 months
Tax rate: 45% taxpayer
Resale value: £0 as I dont own the car

Total Cost to me: £24,120 over 3 years
-----------------------------

Diesel car (Skoda Kodiaq 2018 Diesel): £22,000
Fuel Cost: £100 per month or £3600 over 36 months
Car Tax: £165 per year or £495 over 36 months
Maintenance: £200 per year or £600 over 36 months
Resale value after 3 years: £15000 (according to MoneyCalculator based on medium depreciation)

Total cost to me:£11,695
------------------------------
So the second-hand Skoda is £12,425 cheaper over 36 months?

Grey_Critic

***Fuel Cost: £5 per week or £720 over 36 months***

From what I am reading that is very optomistic

Grumpy_chap

Shrub101 said:

Hi,

I need to trade in my old Skoda Superb Diesel as the ULEZ zone may be extending to the end of my street.

Everyone I know keeps telling me how great buying a new electric car on salary sacrifice is, and how it saves so much money, but when I run the numbers it seems vastly more money than buying an equivalent second-hand Euro 5 compliant 4yr old Diesel / Petrol. Even when I adjust for fuel cost, insurance, tax and depreciation my numbers tell me that the electric car is costing me £12.5k more over a 3yr time period.

So what am I missing everyone? Is it just that friends and family are used to leasing/paying interest on their cars and therefore it feels better to them than buying outright?

Help me understand and to justify this to my wife who thinks my numbers must be wrong!

Thanks all,

Jon
------------------------------
My rough numbers:

Electric Car (Skoda Enyaq iV Estate 82kWh 150kW Slpn+ 80 Auto): ~£650 per month or £23,400 over 36 months. (based on a quote from Zennith our scheme provider)
Fuel Cost: £5 per week or £720 over 36 months
Tax rate: 45% taxpayer
Resale value: £0 as I dont own the car

Total Cost to me: £24,120 over 3 years
-----------------------------

Diesel car (Skoda Kodiaq 2018 Diesel): £22,000
Fuel Cost: £100 per month or £3600 over 36 months
Car Tax: £165 per year or £495 over 36 months
Maintenance: £200 per year or £600 over 36 months
Resale value after 3 years: £15000 (according to MoneyCalculator based on medium depreciation)

Total cost to me:£11,695
------------------------------
So the second-hand Skoda is £12,425 cheaper over 36 months?

You can only have EV via SS if your employer offers that.

Does the amount of SS affect pension contributions / accrual?

ComicGeek

You're comparing a brand new £50k EV to a £22k second hand diesel, of course the new EV is going to be more expensive in that situation.

In a few years time you might be able to buy a 4 yr old Enyaq for a lower price, but still not going to be £22k

DrEskimo

Do the comparison with a second hand EV (although not currently...maybe need to wait!) and the cost savings can be significant.

SouthLondonUser

OP, you're not comparing comparable cars.

Compare the EV vs a new or newish petrol car of the same class (maybe a VW T-Roc?) and I imagine the EV will come out better.

Also, the BIK for EVs is set at 2% till March 2025 but may well go up after that, no one can know.

The maintenance costs for the petrol car seem way too low. Are you sure you won't be replacing tyres? No major service in that period? Most cars require major (ie more expensive) services every x years or y miles.

ididgetwhereiamtoday

You can buy a  2 year old leaf for £22k and your costs and depreciation will be far better than the second hand skoda. That is a better comparison. A new 50k car even on SS is not really going to make good financial sense. 

400ixl

Also remember with salary sacrifice that money is coming out of your pre tax salary, so if you would pay 45% then that is removed.

Comparing an all encompassing (insurance, maintenance etc) new car against a 4year old car is also not comparing like for like, but I do get why you are as it is a comparison of TCO for two options.

The other risk you have is that when Euro 7 comes in in 2025 that ULEZ etc may move to Euro 6 being the new minimum limit.

Herzlos

You're also missing the interest on the diesel car. You've just got it at £22k, which you're either financing and paying interest on, or you're paying cash and thus losing interest on vs the lease.

For example, this Skoda Kodiaq https://www.arnoldclark.com/used-cars/skoda/kodiaq/2-0-tdi-edition-5dr-dsg-7-seat/2018/ref/arnec-u-64070 is going to cost you about £366/month if you take out a PCP on it. It'll be lower if you use the trade-in from the Superb though.

That's pretty much the same as your EV will cost - £357/month after removing the 45% tax on a £650/month car.

You'll then save a fortune in fuel, servicing, etc.

I'm assuming your £650 month figure is before tax, given that you can get a new one without SS for £560 month seperately : https://www.arnoldclark.com/new-cars/skoda/enyaq/132kw-60-loft-62kwh-5dr-auto/0/ref/blk_o2qmaig1e85ldfbt

Of course, monthlies aside you need to try and figure out how the running costs over 3 years would compare to the residual value of a 7 year old Kodiaq. You're still comparing a £40k car to a £22k car though so the Kodiaq will almost certainly come out on top.

However, if you were to look at a Hyundai Kona EV for £30k, I think it'd work out much more favourably.

SouthLondonUser

OP, do you have to pay any upfront deposit in your lease?

Many leasing schemes done privately, without a salary sacrifice through your employer, require an upfront deposit, while many (not all) salary sacrifice leasing schemes don't. So the monthly figure might be different but you obviously need to compare the total cost over the years of the lease.

Grumpy_chap

Herzlos said:

However, if you were to look at a Hyundai Kona EV for £30k, I think it'd work out much more favourably.

As much as the OP was comparing a used ICE versus new EV, which is an unfair cost comparison, the Kona is unlikely to be a suitable alternative.
The OP was considering two giant SUVs (Kodiaq vs Enyaq), the Kona is much smaller, more akin to the Kamiq.