Zenith conducts employee salary sacrifice survey
When asked what they particularly like about a salary sacrifice car arrangement versus an alternative arrangement, cost savings is the main influencer in the decision making process, with 41% of drivers being primarily attracted by the potential savings. Thirty two percent said they were attracted by the hassle-free motoring and stability of costs that the all-inclusive schemes offer, with all costs fixed for the duration. The benefit to the environment of the scheme is important to 11% of drivers, whilst 9% like the choice and flexibility. Five percent like the way the scheme is accessible to more than just existing company car drivers and 2% are attracted by the ability to use the scheme to fund a second family car.
The cost efficiencies delivered through tax savings, the enhanced corporate discounts and the all inclusive package with fixed costs, are helping to increase demand for salary sacrifice during a period when disposable income remains tight. Employees benefit from knowing how much the car will cost from the outset and they are protected from market fluctuations, including insurance and maintenance. Road tax, accident management, windscreen and tyre replacements are also included in the price and the figure employees are quoted at the point of order factors in Benefit in Kind tax payments. The only cost not included is their fuel.
Although helping the environment has not been given as one of the two most popular factors, employees can maximise their savings by choosing a low emission car. In fact analysis of Zenith orders shows that employees will, on average, choose a car with emissions well below the emission cap for a scheme, which increases their savings. Employees who select a lower emitting car will also benefit from lower fuel costs, and there is now an increasingly wider choice of fuel efficient vehicles available.
Drivers were asked to state the most important factors when selecting their new car through a salary sacrifice scheme. Again cost was the key factor in car choice given by 33%, next was brand which influenced 22%, followed by vehicle specification (21%). Fifteen percent said environmental impact of the vehicle was important and 9% said the status of the vehicle. This helps to explain why the most popular makes and models are those that combine cost efficiency, with a desirable brand offering high specification vehicles.
Employees were also asked what type of body style they would prefer. A hatch or saloon is the most popular body style (preferred by 48%), followed by 3 door coupe (18%) and estate (14%). The next most desirable were 4X4 (10%), 2 door convertible (6%) and MPV/people carrier (4%).
Comments provided on what they viewed to be the benefits of a salary sacrifice car scheme included: “Monthly payment are clear, it’s nice to see how the tax deductions are dealt with”, “All inclusive costs and able to get a brand new car which until now has been out of my price range”; “Saving tax and insurance and opportunity to drive brand new cars every two years” and “No worries, tax efficient motoring without a big deposit to find.”
Popularity of salary sacrifice continues to grow amongst Zenith’s existing customer base and there are several more new schemes due to go live in the next few months. The scheme is helping employers to reward, motivate, retain and recruit employees, during these challenging economic times.