Car salary sacrifice – A benefit that benefits everyone
Those ‘early adopters’ who joined schemes when they were first launched are now on their second or even third car. They have all found that the product really does deliver on the savings it promises and many are now recommending it to work colleagues.
Uptake within existing schemes also continues to rise, with employees witnessing their colleagues arriving at work in brand new cars and hearing them wax lyrical about how much money they are saving.
Today drivers are better informed about the savings generated by tapping into their employers’ discounts, the corporate finance rates and bulk purchasing power of the leasing industry, in addition to the tax and NI savings.
Tusker, UK salary sacrifice car scheme market leaders, recently surveyed their drivers and found that they particularly loved the fact that there was no deposit, the costs were fixed for three years with no surprises, and 78% of drivers had an immediate cash boost when they sold their old car.
They also found that drivers explore the benefits of salary sacrifice with an open mind. Less than 30% have a fixed idea of the car they want when they start looking. Once they take delivery of the car, other benefits become apparent. Whilst all drivers claim to be saving money, some have found driving a salary sacrifice car even cheaper than public transport, while others found that the money they were saving on fuel more than covered their monthly salary sacrificed.
The environment also benefits. Not only are older second hand cars being replaced by more efficient and less polluting models, but all Tusker salary sacrifice cars have their tailpipe emissions fully off-set free of charge through approved schemes, making every one carbon-neutral.
Finally, it is not just drivers who benefit financially from salary sacrifice cars. Tusker commissioned some independent research by PwC into the impact of these car schemes on the Treasury. The report concluded that salary sacrifice cars can be tax positive because of the Benefit in Kind, the VAT on lease payments and VAT on the disposal of the cars at the end of contracts. PwC also noted that salary sacrifice cars helps drive additional tax revenues to the Treasury by promoting sales, in-life management expenditure and disposal of incremental new cars into the economy.
So salary sacrifice cars are a benefit for employers, employees, the environment, the Treasury and the economy. We have come a long way since the sceptics feared that salary sacrifice was too good to be true.
This article was supplied by Tusker.
In partnership with Tusker
Market leaders in salary sacrifice car schemes with more than 15 years’ experience.
