Considering an EV on salary sacrifice scheme

steakmehometonight

I was curious as to what people would do in my position.

I bought a 20 reg Dacia Sandero Stepway second hand two years ago - using a mix of savings, trade in and a 0% credit card which I paid off in a year. I’ve probably done about 24000 miles in the car in this time. I’ve had to pay over £1000 in maintenance too (alternator, battery, new tires) 

Although I’m not paying monthly for the car. I’m shelling out over £300 a month in petrol, tax and insurance.

My workplace is offering a salary sacrifice scheme on new EVs and a Dacia Spring comes in at £209 a month with insurance, service and a charge point installed. I know I haven’t accounted for charging but would it be better long term to cash in on my sandero and opt for the EV?

Interested to hear what people would do. Do you value car ownership over the convenience of a new car with all the extras accounted for.

Brie

A few years back my employer started offering EVs on a salary sacrifice basis and I looked into it very seriously.  What stopped me was that while the scheme admins could tell me what the RRP for the car was and how much I would pay per month for 3 years they couldn't state what the final payment would actually be as that would be dependent on the second hand market at that time. 

I also don't recall there being a charge point included in the deal as that would have been a big incentive.  As it was I didn't want to go into the deal without sufficient info on the financials.  Plus I still don't know if a charge point could actually be installed at our place without significant rewiring.  

On-the-coast

How much is your current car depreciating per month?
And how much could you sell it for, and what interest would you get per month on that amount?

The first is another cost to add to your current car outgoings. 

The second is a saving to offset the new car costs. 

Herzlos

If you can charge at home and/or work you'll find your fuel costs will plummet, so it could well be more cost effective. Plus you'll get the value of your Sandero back. 

The base 45 model of the Spring only comes with a 6.6kw charger so will take 4.5 hours to fully charge, so if you need a faster turnaround it'd be worth upgrading to the 65 which can charge at 34kw and be done in 45 mins (20-80%). 

Newbie_John

Also regarding electricity, how much kWh do you use yearly?

Asking as with EV you would need to move to some of those super cheap night tarriffs close to 5p and that's not just a car but everything else that runs at the same time so if you use a lot already like heating etc. - you will have significant savings there as well.

Grumpy_chap

steakmehometonight said:

I was curious as to what people would do in my position.

I bought a 20 reg Dacia Sandero Stepway second hand two years ago - using a mix of savings, trade in and a 0% credit card which I paid off in a year. I’ve probably done about 24000 miles in the car in this time. I’ve had to pay over £1000 in maintenance too (alternator, battery, new tires) 

Although I’m not paying monthly for the car. I’m shelling out over £300 a month in petrol, tax and insurance.

My workplace is offering a salary sacrifice scheme on new EVs and a Dacia Spring comes in at £209 a month with insurance, service and a charge point installed. I know I haven’t accounted for charging but would it be better long term to cash in on my sandero and opt for the EV?

Interested to hear what people would do. Do you value car ownership over the convenience of a new car with all the extras accounted for.

Does the SS amount have any impact on your (employer) pension contributions?
Any impact on base salary used for such events as redundancy?

DrEskimo

I always found the salary sacrifice schemes to be incredibly poor value for money. Might just have been the provider at my company though. Even with considerable tax savings the net cost was higher than some straight personal lease deals. 

I then realised I could save even more just by buying a used EV in the same way I had always done. Cheaper costs all round. 

I’ve never been a fan of leasing though. I don’t like the restrictions imposed on me on how long and how much I can drive my car (check your excess mileage charges too, I’ve heard on SS they can be quite expensive….).

I kept my last EV for 5yrs and costs were much less than any lease deal. I’m currently driving a Model S performance and you can’t get that new anymore so used was my only option, but also think anything like a Porsche Taycan or Audi e-tron GT would be extortionate on a new lease, so used also gets me far more car for my money (as it always has done). 

My 2ps worth. 

PunkRoquefort

A friend who works for the NHS has just got a car through Salary Sacrifice.

Now that his pension is Career Average based and not Final Salary, like it was when I worked in the NHS, I can't help thinking this may affect his pension.

I may be wrong, plus do not know if the OP has a workplace pension, but this may be something else to consider.

Goudy

In regards to pension, it depends on what type of pension you have.

If it's a Defined Contribution pension (typical private sector pension), then no it won't usually have an effect.
Your contributions are worked before any sacrifice has been taken.

If it's a Defined Benefit pension (most public sectors) it will usually effect it.
Not only do you pay in less contributions because your contributions are worked out after sacrifice, most DC pensions are based on some form of average earnings these days (best three and final three years pensions have almost disappeared) and you have sacrificed some of that earnings.

There are some calculations you can do to work out how much you lose based on your earnings and how much you sacrifice, but over say three years it's often very little compared to the savings, but if you continue to stay on for longer, 6, 9, 12 years then it obviously has a bigger impact.
So it's worth bearing in mind what you would do after.

If it's worth it or not, you'd need to do some calculations.
Search around and see what a comparable private lease would cost you.

I would also cost up what various finance packages would cost you.
Your maintenance costs are pretty much set on a new car as it's new and shouldn't need much and it's under warranty.
You might find that a form of finance with a service package might be more suitable.

Herzlos

DrEskimo said:

I then realised I could save even more just by buying a used EV in the same way I had always done. Cheaper costs all round. 

That's a solid point. A quick check without knowing the details but there's a top spec 24 plate Spring 65 with 600 miles on it for £11,750, and a 2020 Stepway with ~26k miles is selling for £9k (so call it £6k trade in). 

That'd be about £192/year over 3 years or £126 over 5 years with OK credit, and the car is yours at the end. 

It doesn't factor in a charging point or insurance though. 

recordplayer

I've run EV's for 8 years and driven over 60,000 miles in them. 

This becomes a hard and fast economics argument to me. First, do you have a driveway and can you charge at home? If you can, and you can install a charger and move to an overnight cheap tariff, then that makes this whole thing viable, if not, stay with what you've got.

Herzlos makes a very, very good point about EV depreciation. I would not have bought one new as a private individual, the ROI makes no sense, but given steep depreciation a used one is worth considering IF you can charge cheaply at home. If you can sell your current car (BTW, great choice for a commuter vehicle) and buy a used EV, and the payments are covered by the reduction in operating costs, then that represents a good buy. Please bear in mind that your range will be reduced around 25 - 30% in Winter due to the effect cold weather has on battery range. Many used EV's still have 2 years comprehensive warranty and another 2 - 4 years on battery / drivetrain, so you still get new car cover, but someone else has taken pain of steep depreciation.

Good luck with your choice, please keep us posted and don't hesitate to ask if you have any further questions.