Fleet World Workshop Tools
Car Tax Calculator
CO2 Calculator
Car Comparator
Van Tax Calculator
EV Car Comparator
BiK Rates Company Car Tax

Surge in fleet sal sac schemes on back of low BiK

Employer provision of finance solutions to non-company car drivers has surged in the last year, in particular for salary sacrifice.

There has been a large increase – now 53% compared to 39% in 2020 – in employers offering salary sacrifice to non-company car drivers

Research carried out by Arval for its 2021 Mobility Observatory Barometer found just a fifth (20%) of fleets said they were offering some form of finance solution last year, but today this has risen steeply to more than a third (37%).

Of those offering finance solutions to non-company car drivers, more than half (53%) now offer salary sacrifice – up from 39% in 2020.

Cash allowances have also risen slightly – from 52% to 55% – while personal contract hire has risen from 28% to 39%.

Shaun Sadlier, head of Arval Mobility Observatory in the UK, said the dramatic increase in salary sacrifice schemes has almost certainly been powered by the zero or very low Benefit-in-Kind tax rates on electric cars introduced by the Government in April 2020.

“Low taxation on EVs has made salary sacrifice a very attractive option for employees and employers, meaning that the latest, most advanced and environmentally friendly cars can be offered to staff at extremely attractive monthly rates.

“This increase is concentrated among larger employers with more than 500 employees, something that is probably to be expected. Setting up schemes of this kind may not be as high a priority for smaller businesses – although there is impetus within Arval to increase their viability for SMEs.”

Sadlier added that salary sacrifice could well continue to accelerate further in the coming years.

“It provides a means for employers to offer the considerable benefit of new EVs to their employees at little to no cost to their company and will continue to do so as long as benefit in kind taxation remains low.

“What we are seeing emerging is a definite future mobility role for EV-based salary sacrifice as a key element in a wave of new benefits initiatives that are designed to bring innovative options and ideas into play for employees, with only a very limited investment required by their employer.”

Do you offer any of the non-company car drivers in your company a solution to enable them to finance a personal car?

  Overall Fewer than 10 employees


10-99 employees 100-499 employees More than 1000 employees
Yes 37% (20%) 9% (9%) 27% (17%) 52% (25%) 77% (33%)

Which finance solutions do you offer to your employees?


Cash allowance 55% (52%)
Salary sacrifice 53% (39%)
Personal contract hire 39% (28%)

2020 data included in brackets in both tables

For more of the latest industry news, click here.

Natalie Middleton

Natalie has worked as a fleet journalist for nearly 20 years, previously as assistant editor on the former Company Car magazine before joining Fleet World in 2006. Prior to this, she worked on a range of B2B titles, including Insurance Age and Insurance Day.

Leave a comment

Your email address will not be published. Required fields are marked. *