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.
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