Car salary sacrifice schemes

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  • Car salary sacrifice schemes
  • Premier Icon FuzzyWuzzy
    Subscriber

    I’d not actually heard of these before stumbling on a Tesla forum post mentioning it, they seem an interesting way to lease a ULEV car or am I missing something?

    Assuming there’s people on here already doing this, is there anything to watch out for and any schemes recommended or that should be avoided (not sure I’ll ever get my company to agree to start one up but can’t hurt to try…).

    If anyone also can give an example of what they’re paying under such a scheme (pref. as a higher rate tax payer) vs what they’d be paying under a personal lease that would be handy (although I guess as most schemes seem to be fully inclusive with insurance, servicing and breakdown cover that might be an unfair comparison).

    Premier Icon tomhoward
    Subscriber

    MrsTH has one, a Citroen C4 Picasso, all inclusive for the same cost as what the dealer wanted for the car plus servicing (tyres extra etc) so we’re saving the cost of insuring it, plus any tax benefit. Not sure who is running the scheme though.

    She’d be more than happy to do it again, but her work have stopped the scheme 😤

    My work did it through tusker, but from what those that looked into it said, it was only good for small cheap runarounds, anything bigger than a focus and it started to not be so great value.

    Ymmv

    I get the occasional emails about this. They never seem anything like as cheap as the best lease deals but perhaps your work has better deals.

    Premier Icon richardkennerley
    Subscriber

    I’ve looked at doing it through an NHS scheme. It was a few years ago, but I ended up going for a personal lease instead as I felt it was much cheaper, even after the tax benefits. I guess it depends on the exact deal your looking at.

    Does a long term salary sacrifice like that ultimately affect your pension? I was concerned I would end up paying less in thereby reducing my final amount.

    Premier Icon FuzzyWuzzy
    Subscriber

    I was wondering if who was managing it would affect the cars available (or if they just go to multiple car companies/other leasing companies), would be a bit pointless if you could only get a few car options.

    My pension is mostly reliant on me winning the National Lottery sometime in the next 20 years so not too concerned about any hit on payments to it ;p

    footflaps
    Member

    Does a long term salary sacrifice like that ultimately affect your pension? I was concerned I would end up paying less in thereby reducing my final amount.

    I wouldn’t have thought so, we have salary sacrifice pensions at work and the company % paid in is based on your gross (before sacrifice). Plus we also get given the employers NI contribution which would have been paid on the sacrificed part of the salary, which adds a few more % to the pension.

    I have been looking in to this through work and priced up a BMW i3s with metallic paint, Apple Car Play and a few other options for around £350 pm. That’s inclusive of servicing, tyres, insurance for two of us and with 10k pa mileage so I didn’t think it was too bad.

    From memory higher rate payers saved another £40 or so. Our system is worked out after pension so isn’t as generous as some so as a high rate payer I’d imagine you could get a similar car sub £300pm.

    footflaps
    Member

    From memory higher rate payers saved another £40 or so.

    I’d have thought they’d save another 20%, which is £87.5 I think.

    (£350/0.8 = £437.5 gross. 20% of £437.5 = £87.5).

    Yep probably although I think the bik tax goes up. Can’t remember exactly but the savings for higher rate seem to widen when looking at electric cars.

    Premier Icon molgrips
    Subscriber

    I take the cash, cos I can. But my mate looked into it. For a Nissan Quashquai he was looking at a total of about £520 per month worse off, due to the BIK tax, which seems like a hell of a lot of money for a dull car you don’t even own.

    However it starts to look a lot more favourable when you look at electric cars because the BIK is much lower.

    Premier Icon FuzzyWuzzy
    Subscriber

    Yeah, I found one calculator with a Tesla Model 3 P in it and it worked out around £500 monthly salary hit over 3 years (I expect for the base car rather than any extras like insurance, although it doesn’t say what the car cost it’s based on is). Seems to compare well with personal lease deals (cheapest I’ve seen is also £500 a month over 3 years but that’s with a massive 12 months up front cost which you don’t have with salary sacrifice). Something tells me I’m missing something though and I wouldn’t actually save £6k over the 3 years…

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