The Electric Car Scheme improve and expand their used car offering
Last updated: Jul 1, 2024
The most common complaint we hear is: “Electric cars are unattainable; they’re too expensive.” This remains one of the most significant barriers to wider electric vehicle adoption.
Over the past three years The Electric Car Scheme, they've endeavoured to make electric cars more accessible by introducing EV salary sacrifice schemes at workplaces across the UK. However, despite these efforts, many still find electric cars financially out of reach, even with salary sacrifice. Hence, they’ve enhanced their offering to include used electric cars available to lease on salary sacrifice.
Who is The Electric Car Scheme?
Switching to an electric car is one of the most significant ways you can make a positive change towards net zero. The Electric Car Scheme makes it cheaper and easier than any other option through salary sacrifice.
The Electric Car Scheme is different from the usual car leasing providers. Instead of paying for a lease with your post-tax income or net salary, the fixed monthly payments for the car are taken from your salary before any Income Tax or National Insurance is deducted. This means you can save between 30-60% on the cost of the lease.
Read more about how their scheme works here.
What is salary sacrifice and how does it work?
Salary sacrifice is an agreement between employers and employees where an employee ‘sacrifices’ part of their gross salary in exchange for non-taxable employee benefits like retirement savings, childcare support, bikes, or in this case an electric car lease.
This setup reduces income tax and national insurance contributions as you pay for the cost of the lease from your gross, rather than net salary, allowing your employees to save between £5,000 to £15,000 on their car through salary sacrifice.
1. The employer leases an electric car on behalf of their employee.
2. Employees get the car (as a benefit): The employer agrees to provide the car in exchange for the employee looking after the car and sacrificing a portion of their gross salary to pay for it.
3. Sacrificed salary is not taxable, saving thousands of pounds. The employee saves on the cost of the lease by paying from salary before tax.
A car leased through a salary sacrifice scheme is an employee benefit, and therefore is classified as a “company car”. As such, a small Benefit-in-Kind (BiK) tax is payable and is calculated based on three factors: the level of CO2 emissions produced by the car; the P11D value of the car (the on-the-road price of the vehicle); and your personal tax bracket.
You can find more information about how BiK is calculated on The Electric Car Scheme’s website here.
What is used car salary sacrifice, and why is it a great offering?
One of the common barriers that prevent people from entering into the electric car market is centred around the high cost of leasing an EV. Over the last 3 years, The Electric Car Scheme’s mission has been to make net zero the obvious choice, by offering the lowest possible prices to employees, through salary sacrifice. However, even with these amazing cost savings, some people are still being priced out of leasing their dream EVs.
Used electric cars are now available to lease from The Electric Car Scheme - making the switch to electric the cheapest it has ever been! Learn more about this great offering here.
Typically, when a car reaches the end of its lease term, it is returned to the leasing company and will likely be sold at an auction. However, The Electric Car Scheme felt there was value in these used cars, beyond what the rest of the market could see. Instead of returning these used EVs, they are repurposed and offered to employees signed on to The Electric Car Scheme at a significantly discounted price.
Moreover, not only can you get an EV at a great price, but you can say goodbye to long lead times, and have your car sitting in your driveway in just 14 days! Over the last few years, due to supply chain issues, the average lead time for a brand-new factory-ordered EV can be anywhere from 8-12 weeks. Now, with The Electric Car Scheme, you can get behind the wheel of an EV almost immediately.
Furthermore, Unlike other salary sacrifice providers who offer only a limited selection of used EVs, The Electric Car Scheme has a wide selection of used cars available from across the UK for you to choose from.
You may be asking yourself, how does The Electric Car Scheme ensure the quality of its used cars? Firstly, in this context “used” means that the car has only had one previous owner. Additionally, the selection of cars made available are thoroughly vetted and inspected, and are chosen for their quality and condition. While there may be some degree of fair wear and tear, as will be standard with any used car, The Electric Car Scheme provides detailed and transparent pictures of the vehicle to help you make an informed purchase decision.
Visit their quote tool and explore the used cars they have available to lease now. If you see something you like, act quickly, as these used cars are selling out fast!
How much can you save through salary sacrificing a used car?
Let's now take a deep dive into the actual cost savings you can make, salary sacrificing a used electric car.
Lease a used Audi Q8 e-tron
The Audi Q8 e-tron represents a premium SUV electric car, typically commanding a monthly cost of around £800 through salary sacrifice for a new model. This calculation is based on a lease agreement with 10,000 miles per year over a 36-month term, factoring in a higher tax rate salary. However, opting for a used version under the same lease terms would reduce the monthly payment significantly to just £579, representing approximately a 37% saving.
Example below:
Salary sacrifice a used Tesla Model 3
The Tesla Model 3 stands as one of the best-selling electric cars globally. Opting for a new Model 3 through salary sacrifice, with a lease covering 10,000 miles per year over a 36-month period for a high-rate taxpayer, would entail a monthly payment of £662. However, selecting a used Model 3 under the same lease conditions would slash the monthly cost to just £381, representing a savings of over 40%.
Used Tesla Model 3 example below
Salary sacrifice a used MG ZS
What about more affordable EVs, like the MG ZS? Although the lease cost of these vehicles is already set low at around £349, you can still save around £41 by getting a used EV. Add that up across a 3-year lease, and that's almost £1500 worth of savings. In this economy, I’ll take any savings I can get!
Used MG ZS example below
Get an instant quote on your dream used electric car on The Electric Car Scheme website here.
Every person wants to make choices to achieve a net zero future and every company in the UK can help their employees do that, by offering The Electric Car Scheme as an employee benefit. Used car salary sacrifice will make electric cars even more accessible and we’re excited to get more people into EVs.
Book a call with our Business Development team here to begin your journey towards Net Zero.
The Electric Car Scheme’s pricing is based on data collected from The Electric Car Scheme quote tool. All final pricing is inclusive of VAT. All prices in the above table are based on the following lease terms; 10,000 miles pa, 36 months, and a £70,000 annual salary, and are inclusive of Maintenance and Breakdown Cover. The Electric Car Scheme’s terms and conditions apply. All deals are subject to credit approval and availability. All deals are subject to excess mileage and damage charges. Prices are calculated based on the following tax saving assumptions; England & Wales, 40% tax rate. The above prices were calculated using a flat payment profile. The Electric Car Scheme Limited provides services for the administration of your salary sacrifice employee benefits. The Electric Car Scheme Holdings Limited is a member of the BVRLA (10608), is authorised and regulated by the FCA under FRN 968270, is an Appointed Representative of Marshall Management Services Ltd under FRN 667174, and is a credit broker and not a lender or insurance provider.
