Salary Sacrifice EV - is it worth it?

chile_paul2

So, would be grateful if you fine folks could help me out with my thinking regarding potentially signing up to my companys salary sacrifice EV scheme.

My current position is I own a 2017 plate VW Passat with 58,000 miles on the clock - don't drive that far any more, between 5,000-7,000 miles a year.

I've calculated the costs of continuing to run this current car as:

Depreciation (forecast current value of £11,000 dropping to £5,000 over next 5 years): £1200 per annum
Insurance: £500 per annum
MOT / Service / tyres: £750 per annum
Road Tax: £195
Loss of interest (what I would earn on interest if I sold the car and had the money sitting in bank / investments earning 5%): £550 per annum

Total costs:£3195 per annum / £266.25 per month

My company offers a EV salary sacrifice scheme offering pre-loved cars which are all bundled up with road tax, insurance, servicing etc all included.

The best deals currently are, after the salary sacrifice benefits on tax and NI have been taken into account:
Nissan Ariya (50,000 miles, 22 plate) - £372 a month  
Volkswaged ID.5 (49,000 miles, 22 plate) - £402 a month
Tesla Model Y (55,000 miles, 22 plate) - £428 a month

On all of these cases I'll be between £110 a month and £160 a month worse off - albeit I'll be driving a newer car and will almost certainly make some fuel savings as well.

Am I missing something, why would I make the switch???

Vitor

IMHO this comparison flatters the EV scheme for 2nd hand cars and it still doesn’t stack up. The Passat depreciation looks pessimistic, the “loss of interest” is a theoretical opportunity cost rather than a real bill, and £750 a year for servicing/tyres at 5–7k miles is likely too high.
Salary sacrifice also adds employment risk and removes flexibility, plus creating 'range anxiety'. At your mileage, EV fuel savings are modest and won’t close a £110–£160 monthly gap even with at home/at work cheap electricity. These schemes mainly suit higher-rate taxpayers or people already changing cars. Financially, keeping the Passat is the rational choice.

WellKnownSid

No you are not missing something - those figures look very expensive to be driving around in a second hand car.  Just checked and a brand new Ariya on 8,000 miles a year is £236 a month on our scheme all-in.

born_again

Direct from Tesla & brand new
Premium long range AWD Tesla Model Y £399 PCP
Base model Y £299 PCP - Both under  premium VED
No servicing with Tesla, so only £195 to add a year (subject to increases)
Why would you buy a 2nd hand one at the price quoted... 

Can you charge @ Home? That is the real test.

chile_paul2

born_again said:

Direct from Tesla & brand new
Premium long range AWD Tesla Model Y £399 PCP
Base model Y £299 PCP - Both under  premium VED
No servicing with Tesla, so only £195 to add a year (subject to increases)
Why would you buy a 2nd hand one at the price quoted... 

Can you charge @ Home? That is the real test.

Yes - already have a charger at home for my wife's EV Nissan Leaf. To be honest we don't need 2 cars and that's where the real saving is to be made (but try telling my wife that!)

chile_paul2

Vitor said:

IMHO this comparison flatters the EV scheme for 2nd hand cars and it still doesn’t stack up. The Passat depreciation looks pessimistic, the “loss of interest” is a theoretical opportunity cost rather than a real bill, and £750 a year for servicing/tyres at 5–7k miles is likely too high.
Salary sacrifice also adds employment risk and removes flexibility, plus creating 'range anxiety'. At your mileage, EV fuel savings are modest and won’t close a £110–£160 monthly gap even with at home/at work cheap electricity. These schemes mainly suit higher-rate taxpayers or people already changing cars. Financially, keeping the Passat is the rational choice.

Agree, I think I was bumping up some of the costs to keep the existing car to try to justify the switch

DrEskimo

I agree, it really is only a means of reducing tax bill for high earners, particularly those earning >£100k where your personal allowance begins to reduce, or if you need to reduce your earnings to qualify for governments schemes like the 30-hour free childcare.

IN all other respects, most schemes I have seen have inflated costs that the net cost still ends up being higher than standard lease deals (even considering the other cost savings, like insurance and servicing). Not to mention the restrictions if you leave the company, potential impact on pensions and that some of the excess mileage charges I've seen are prohibitively expensive!

Woodstok2000

I'd agree with the above posters. I have gone onto a salary sacrifice ev scheme last year and did the same calculations as you - my old car was knackered so I had a clearer choice, and it was only the higher rate tax savings and my mileage (ca 12k pa) that tipped the balance to the ev.

flaneurs_lobster

Sounds to me like you have the perfect balance - small cheap EV for the little lady to do shopping and school runs and a proper car for the man to do proper manly driving.

MeteredOut

flaneurs_lobster said:

Sounds to me like you have the perfect balance - small cheap EV for the little lady to do shopping and school runs and a proper car for the man to do proper manly driving.

1980 called asking for its social commentary back.

QrizB

MeteredOut said:

flaneurs_lobster said:

Sounds to me like you have the perfect balance - small cheap EV for the little lady to do shopping and school runs and a proper car for the man to do proper manly driving.

1980 called asking for its social commentary back.

Agreed, that was all very Gene Hunt!

chile_paul2 said:

To be honest we don't need 2 cars and that's where the real saving is to be made (but try telling my wife that!)

You could sell your Passat and see how you get on with just the Leaf?