Save Money and Drive Smarter with Salary Sacrifice Car Leasing
For many employees, getting access to a brand-new car can feel out of reach due to the high costs of purchasing outright or financing. That’s where salary sacrifice car leasing comes in. It’s a tax-efficient and cost-effective way to drive a new vehicle while reducing your overall expenses. In this article, we’ll break down what salary sacrifice car leasing is, how it works, and why both employees and employers are increasingly choosing this option.
What is Salary Sacrifice Car Leasing?
Salary sacrifice car leasing is an arrangement where an employee gives up a portion of their gross salary in exchange for a brand-new leased car. Because the reduction happens before tax and National Insurance contributions are calculated, the employee makes significant savings.
The scheme usually includes more than just the car itself. Most salary sacrifice car leasing packages cover insurance, maintenance, breakdown cover, and road tax, meaning you can enjoy all-inclusive motoring at one simple monthly cost.
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The Benefits for Employees
For employees, salary sacrifice car leasing offers several key advantages:
- Lower Costs: Paying out of pre-tax salary means savings on tax and National Insurance.
- Inclusive Packages: Costs like servicing, insurance, and breakdown cover are bundled in.
- Access to EVs: With government incentives and low Benefit-in-Kind (BiK) tax, electric cars are particularly affordable.
- No Hassle: You get a brand-new car with minimal admin and no worries about depreciation.
With the rise in electric vehicles, more employees are turning to salary sacrifice car leasing as the most affordable way to go green.
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The Benefits for Employers
It’s not just employees who win. Employers also benefit from offering salary sacrifice car leasing:
- Attract & Retain Staff: Offering this perk makes your company more competitive.
- Sustainability Goals: Encouraging staff to drive low-emission or electric cars supports green initiatives.
- No Direct Cost: The scheme is cost-neutral for employers.
- Improved Morale: Providing staff with an affordable way to drive boosts satisfaction.
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Why Electric Cars Make the Most Sense
One of the biggest attractions of salary sacrifice car leasing is the affordability of electric cars. Thanks to very low BiK tax rates on EVs, employees can save thousands compared to leasing privately.
For example, cars like the Tesla Model 3, Nissan Leaf, or Hyundai Kona Electric are significantly cheaper through salary sacrifice car leasing than they would be via a personal lease. This makes switching to an EV not only environmentally friendly but also financially smart.
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How to Get Started
Setting up a salary sacrifice car leasing scheme is straightforward:
- Employer signs up with a leasing provider offering salary sacrifice schemes.
- Employees choose from a range of available cars.
- Salary reduction is applied, and the employee receives their new car with all-inclusive benefits.
Most schemes run for 2–4 years, giving employees plenty of time to enjoy their vehicle before upgrading to the latest model.
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Final Thoughts
Salary sacrifice car leasing is a win-win for employees and employers alike. It allows drivers to save money, access the latest vehicles (especially EVs), and enjoy hassle-free motoring, while companies benefit from offering an attractive, sustainable perk.
If you’re looking for a smarter, more affordable way to drive, explore our range of salary sacrifice car leasing options and take advantage of the tax savings today.