The move to electric cars, the rEVolution, if you will, is very much upon us. Month-on-month sales of fully electric vehicles are soaring, as the UK’s charging network expands at pace to meet future demand.
The last 5 years has seen the average vehicle range rise from under 200 miles to 270 miles on a charge and with many of the latest EVs able to better 320 miles on a single charge, ‘range anxiety’ is a thing of the past for all but the most prolific drivers. Price wise, economies of scale, and new manufacturing techniques have seen the cost of EVs drop dramatically in the last 24 months, to a place of parity with petrol and diesel cars. With fuel costs not set to drop any time soon, but with the ability to charge EVs on low electricity tariffs, the lower running costs of EVs makes them a winner for most drivers.
However, when it comes to getting behind the wheel of a new (or used) EV, it seems that many consumers are still missing a trick that makes them even more accessible.
A staggering 92% of all cars on the UK’s roads are now purchased using consumer finance. Whether a PCP or HP deal, or a lease agreement, UK drivers are now firmly in the ‘pay monthly’ camp. Around 10% of the driving population enjoy their vehicles as part of a company car scheme, which shifts the ownership of the vehicle to the employer, although this can incur a hefty tax, known as Benefit in Kind (BiK), which is calculated on the car’s value and emissions.
There is a sweet spot for EVs however, in that while BiK tax begins at 16% for petrol or diesel cars, it is just 2% for EVs, and will rise incrementally to just 8% by 2028. Even better, if you take an EV through your employer, as part of a Salary Sacrifice scheme, you will save money on your income and national insurance contributions at the same time.
Much like childcare vouchers, or travel to work schemes, taking a car on salary sacrifice means that the money used to pay for the vehicle is taken directly from your salary before the tax and national insurance is applied. On top of this, Salary Sacrifice Car Benefits Scheme providers such as Tusker can provide you with a brand-new EV, fully insured, taxed and maintained for a single monthly cost, with no deposit needed.
It’s a great deal for motorists, but comparatively few drivers know about it and not many employers consider offering it, despite the overwhelming number reasons for doing so. These schemes support the recruitment and retention of staff, and many also provide protections for employees with comprehensive early termination, redundancy, and long-term sickness protection, de-risking the agreement for both parties. Both employer and employee save money on income tax and national insurance contributions and, importantly, by shifting employees into low emission or zero emission vehicles, companies can seriously reduce their emissions while enjoying multiple other benefits.
If your job offers a salary sacrifice car benefit scheme, is it time you looked into it? And, if it doesn’t, is it time they introduced one?
