LEASING an electric car through salary sacrifice can save up to 50% of the running costs compared to a personal contract hire (PCH) agreement, making a huge difference to a household’s income during the current cost-of-living crisis.
Fleet Alliance said it is seeing huge uptake of its new salary sacrifice scheme. Since its launch at the start of this year, some 54 companies have taken advantage of the Fleet Alliance salary sacrifice scheme, which has been aimed primarily at SMEs but which is available to businesses of all sizes.
So far over 4,000 employees have been able to access this exceptional benefit and acquire a brand-new electric car saving thousands of pounds a year, thanks to the Fleet Alliance scheme.
At the same time, a salary sacrifice EV can also deliver a fuel cost saving of around £2,000 per annum compared to a fossil-fuelled equivalent, the Glasgow-based fleet management and leasing specialist calculates.
To illustrate the point, Fleet Alliance looked at the running costs of an all-electric Mercedes-Benz EQC Estate 400 300kW Sport 80kWh 5dr Auto obtained through its salary sacrifice scheme, compared to the same car under a PCH agreement.
The full monthly price under the salary sacrifice arrangement was £681, including all servicing, maintenance – such as new tyres – and insurance. The price also took into account savings in Income Tax and National Insurance achieved from the reduction in gross pay before tax, while there is a negligible Benefit-in-Kind tax charge to pay, currently 2% for zero emission vehicles.
However, the same vehicle under a PCH arrangement, based on three years/10,000 miles per annum, no deposit, one payment in advance, fully maintained and including insurance, would cost £1,354 per month – almost twice as much as the salary sacrifice vehicle.
Fleet Alliance Chief Executive Andy Bruce said: “Over a three-year deal, the savings under our salary sacrifice scheme for the electric car add up to a massive £24,000 – a huge boost for any household with inflation currently at 9% and fuel prices at record levels.
“There is little wonder we are seeing such a huge interest in our salary sacrifice scheme when British household incomes are under cost pressure like never before. However, the savings don’t just stop there, there are huge fuel cost savings to be made when switching from an ICE vehicle to an EV due to record prices at the pumps.”
To illustrate the point, Fleet Alliance used the same Mercedes EQC all-electric Estate, but this time compared it against a petrol-driven Audi Q5 Estate 45 TFSI Quattro Sport 5dr S Tronic.
Based on an average 192 miles driven each month for both vehicles, Fleet Alliance calculated the cost of the Mercedes at 2.8m/kWh, the electric equivalent of mpg and using electricity at a widely available cost of 14.4p/kWh.
For the Audi, Fleet Alliance based its figures on an average mpg of 32.5 at a cost of for unleaded petrol at 185p per litre.
The savings were considerable. The Mercedes EQC had an electricity cost of £9.87 per week compared to the weekly petrol cost of the Audi Q5 at £48.68 – a saving of up to £39 a week or £2,000 a year.
“In reality, the savings will probably be higher still, since the Mercedes EQC’s average mileage per kWh is highly conservative and, if EV off-peak charging is used, the cost per kWh could drop to as little as 4p. Meanwhile, the Audi is unlikely to hit its average mpg is real usage,” said Bruce.
“Nevertheless, the comparison shows how much money you could be saving by switching from fuel pump to electric charger. Over three years, that’s a £6,000 fuel cost saving which could help motorists to budget more efficiently and save money, despite the rising cost of living.”
Bruce said he was not surprised there had been such a huge interest in the Fleet Alliance salary sacrifice scheme.
“A salary sacrifice scheme takes maximum advantage of prevailing tax regimes and the growing movement to electric cars. And it provides an excellent opportunity to reduce a business’s carbon footprint while providing employees with a brand-new electric vehicle at minimal benefit-in-kind impact.
“In short, given the current economic circumstances, there has never been a better time to acquire a brand-new all-electric car through a salary sacrifice scheme, like ours, than now.”
