Silverstone Leasing has launched a new car salary sacrifice scheme catering to the demand for leasing electric vehicles (EVs).
The EVolve Car Scheme allows employees to lease a car at a lower cost than it would otherwise cost if they did so independently, and it reduces their taxable income. It delivers quoted savings of 30-60% on leasing EVs, with no fees and free setup. The initiative also benefits employers by lowering National Insurance contributions.
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While the scheme will look after insurance, maintenance and running costs, the employee must cover fuel and any repair of damage costs.
Salary sacrifice
Scott Norville, the Account Director at Silverstone Leasing, highlighted the favourable benefit in kind (BiK) calculations for EVs compared to internal combustion engine vehicles. Norville predicts increased demand for EV leasing, particularly with the entry of affordable EVs from the Chinese market.
Speaking to Motor Finance Online, Norville predicted that, while the salary sacrifice market is not yet at its pinnacle, next year is going to be strong.
Salary sacrifice refers to an agreement between an employee and the employer to give up a part of their salary in exchange for non-cash benefits such as cars, but it also can include pension contributions, cycle-to-work schemes and technology like laptops and tablets.
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By GlobalDataThe salary sacrifice concept involves an agreement between employees and employers to exchange part of the salary for non-cash benefits, such as cars. This government-backed scheme offers tax savings for both parties. In this scenario, employers lease a car on behalf of the employee, who repays lease payments from their pre-tax salary over a fixed period, typically two to four years.
Norville suggests that a three-year lease period with a mileage allowance of 15,000 miles per year is likely to be the most popular.
“Anything under two years, just becomes too expensive for the user, and four years is just slightly a little bit too long,” he said.
EVolve’s approach
EVolve distinguishes itself through a bespoke consultation service, aiming to understand customer needs and recommend suitable products. Norville emphasises the company’s personalised approach compared to call center-centric businesses.
“The team understand what the products are all about, what’s right for the customer, unlike some businesses where it’s more of a call centre approach,” Norville said.
To address the challenge of employees changing jobs during the lease period, EVolve provides an early termination policy, allowing the lease to be transferred to another employee or returned to the finance company at no cost. The scheme is initially marketed to businesses with existing contracts in Northamptonshire and Milton Keynes, with plans for national expansion in the future.
