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Keen to buy an electric car but concerned about the cost? Buying an electric car might seem like a more expensive option in comparison to petrol or diesel models, but with a range of finance options available, there are ways to make it more affordable.
One of these is by using the electric car salary sacrifice scheme. Sacrifice schemes are available on a few different non-cash benefits – childcare vouchers, or cycle to work schemes which allow employees to purchase bicycles at a reduced personal cost, are popular examples. But, did you know some employers might also offer a salary sacrifice scheme to help you buy or drive an electric car? Well, there are!
With a salary sacrifice scheme, the cost of the benefit – in this case electric cars – is taken from an employee’s salary before national insurance and income tax has been deducted, instead of paying for it after being taxed. This saves the employee money by not paying tax on the lease of the vehicle. Although there will be something called Benefit in Kind (BIK) tax, because the employee is effectively accessing a company car, the rate is low for electric cars.
BIK tax on a company car is partly calculated according to the CO2 emissions of the vehicle, so here’s another benefit and advantage of driving an EV. For a car with an all-electric range of 130 miles plus, the BIK tax is just 2% for the financial year 2022-23, and that’s set at 2% for 2023-24.
Salary sacrifice for an electric car might sound complicated, but it’s really not. First of all, you need to ask your employer whether they offer it. There’s no cost to your employer to do so, so if they don’t already, you can ask them to sign up with a provider.
For the employer, it’s a good opportunity to offer employees a welcome perk and benefit that can potentially help with staff retention and happiness. For the employee, if you’re approaching the end of an existing agreement on a car rental or lease, it could be a good time to ask your employer to consider the salary sacrifice scheme.
There are a range of companies who offer electric car leasing. When an employer has signed up with one, the employee will be given a list of suitable vehicles to choose. Pick one from the list that most appeals – and fits into your budget – and there you have it; a brand new all-electric car to drive.
Using an electric car salary sacrifice scheme typically delivers more than just a vehicle to drive. Many providers offer an all-in package as part of the lease, including charger, servicing, insurance, maintenance and sometimes even insurance and access to free charging. So, for the employee and driver of the car, there are few extra costs to pay – bonus!
Ready to buy an electric car? You can read more about why buying an electric car is becoming more appealing here, and view the latest selection of new and used electric cars for sale at Dick Lovett here.
Dick Lovett represents BMW, MINI, Jaguar, Land Rover, Ferrari, Porsche, Aston Martin and BMW Motorrad and has dealerships throughout the South West and Wales. Our locations are in Bristol, Cardiff, Hungerford, Melksham (near Bath) Swindon and Tewkesbury. Find contact details for your nearest dealership here.
