Salary sacrifice leasing

[AyBee]

Sounds like a great deal, but I'd be double and triple checking the pension position because of the horror stories.

I've put my plans on hold for now - what should be an absolute no-brainer for a 60% tax bracket employee is no where near as cheap as it could be because the companies running the schemes are creaming off the top. I got the below from a salesman at our scheme:

Pointless Salesman said:

All our plans are already discounted and fixed direct from the manufacturer [NB: this is blatantly not true given the insurance and extras]. We do not have any admin fees or hidden charges, even zero upfront deposit.

Personal Lease
Per month £916.56 (Including Maintenance)
Contract: 36 months/10k miles
Initial Payment: £916.56 (inc. VAT) +294.00 Admin Fee = £1,210.56
Total Cost £34,206.72

Salary Sacrifice:
Net amount [NB: no idea why he chose to use Net amount - classic salesman] after tax savings per month: £549.94 (includes the whole package i.e. insurance as well)
Contract: 36 months/10k miles
Initial Payment: £0.00
Total Cost £19,797.84 after the savings on tax and national insurance

Anyway, when I asked him if my calculation using the gross amount (Total Cost of £46,404 for 3 years), he ignored it. So that's £12k extra over 3 years for insurance, tyres and breakdown. Such a shame because I'm currently running around in a 30mpg petrol estate and would like to try electric, but the petrol estate is still cheaper overall. He also said he couldn't do any better than the website quotes, which kind of makes his role pointless.

Has anyone had more than 1 provider at their work? One assumes that they essentially get monopoly positions once they are your employer's provider of choice and it strikes me that some more competition would be good to actually make these schemes better for the employees?

[Vanden Crash]

If you think 22k on an asset you’ll never own is gvfm then go for it but 600 quid is 600 quid

Paying someone’s depreciation so you can have something shiny?

Go 25k on a loan get an e39 m5 (so a real m) and enjoy 3 years cash free motoring and flog it

[SWoll]

Vanden Crash said:

If you think 22k on an asset you’ll never own is gvfm then go for it but 600 quid is 600 quid

Paying someone’s depreciation so you can have something shiny?

Go 25k on a loan get an e39 m5 (so a real m) and enjoy 3 years cash free motoring and flog it

Is this a serious post?

Not everyone wants to run a 25 year old specialist car with 120k miles on the clock funnily enough.

If no-one bought/leased new cars where do you think happens?

[AyBee]

Vanden Crash said:

If you think 22k on an asset you’ll never own is gvfm then go for it but 600 quid is 600 quid

Paying someone’s depreciation so you can have something shiny?

Go 25k on a loan get an e39 m5 (so a real m) and enjoy 3 years cash free motoring and flog it

Every vehicle has costs, you just have to work out your appetite for known and unknown. Let's break down your loan of £25k for a E39 M5:
- £5k in interest if you can pay it off in 3 years
- £6k (ish) in fuel more than the equivalent electric
- £1k (ish, probably more) per year for tax, tyres, breakdown and insurance (will vary depending on your age/driving history/location)

So then the only question left is whether you think you can do maintenance and depreciation (adding 30k miles won't help!) on an E39 for £8k over 3 years vs. the guarantee of not having additional costs in the iX. Not quite the no-brainer you may think it is.

[SDK]

Another benefit of an EV is that it gets you access to very cheap off-peak electricity tariffs.
I’m running our house 24/7 through Autumn, Winter and early Spring (very low solar months for our house location) on 7.5p kWh vs the price cap of 34p kWh.

Means I’m saving about £700 on 4 months of lower priced energy used for house consumption.

I have a salary sacrifice Polestar 2, through Tusker.
It costs me £580 per month for everything, just add fuel which will be £680 after 3 years / 36k miles.

I see it as a cheap way to use a new car. Sure, it’s not for everyone but 100% works for us.
-> 400bhp
-> 720Nm
-> loaded with high spec and tech
-> Super convenient and low cost home charging. Not visited a petrol station in 3 years and only used a public charger 5 times in 30 months.
-> As mentioned - provided access to cheaper electricity tariffs, to reduce our household energy bill.

Edited by SDK on Sunday 5th March 19:49

[Muzzer79]

Vanden Crash said:

If you think 22k on an asset you’ll never own is gvfm then go for it but 600 quid is 600 quid

Paying someone’s depreciation so you can have something shiny?

Go 25k on a loan get an e39 m5 (so a real m) and enjoy 3 years cash free motoring and flog it

20k miles a year in an E39 M5? My relationship with the local BMW Indy isn’t that good, nor is the one with my local petrol station.

Plus, I can just imagine my employer’s reaction if I flagrantly disregarded our company car policy and rocked up in a 20 year old BMW M car.

[jgrewal]

I didn't respond because I didn't have the energy. Comparing a E39 BMW purchase (which looks like a lovely car) v 2023 IX electric SUV lease is just a non starter.

Edited by jgrewal on Sunday 5th March 19:47

[survivalist]

Muzzer79 said:

Vanden Crash said:

If you think 22k on an asset you’ll never own is gvfm then go for it but 600 quid is 600 quid

Paying someone’s depreciation so you can have something shiny?

Go 25k on a loan get an e39 m5 (so a real m) and enjoy 3 years cash free motoring and flog it

20k miles a year in an E39 M5? My relationship with the local BMW Indy isn’t that good, nor is the one with my local petrol station.

Plus, I can just imagine my employer’s reaction if I flagrantly disregarded our company car policy and rocked up in a 20 year old BMW M car.

In my experience employers are happy to ignore their own rules if you’re doing a decent job.

Apart from when I was 21 and company car tax was lower than my insurance premium, I don’t think I’ve ever been compliant with the car allowance rules.

Given how many people seem to this it’s the end of days for ICE (even though it’s likely a good 30+ years) I can see how people are comparing running an older interesting car with huge running costs (but limited depreciation) vs something dull with low running costs and high depreciation .

[SWoll]

survivalist said:

In my experience employers are happy to ignore their own rules if you’re doing a decent job.

Apart from when I was 21 and company car tax was lower than my insurance premium, I don’t think I’ve ever been compliant with the car allowance rules.

Given how many people seem to this it’s the end of days for ICE (even though it’s likely a good 30+ years) I can see how people are comparing running an older interesting car with huge running costs (but limited depreciation) vs something dull with low running costs and high depreciation .

Employers all work differently. I've had those with a similar approach to yours, and others that wanted to see every last bit of paperwork on a yearly basis.

Nowt to do with "doing a decent job" IME.

[Muzzer79]

survivalist said:

Muzzer79 said:

Vanden Crash said:

If you think 22k on an asset you’ll never own is gvfm then go for it but 600 quid is 600 quid

Paying someone’s depreciation so you can have something shiny?

Go 25k on a loan get an e39 m5 (so a real m) and enjoy 3 years cash free motoring and flog it

20k miles a year in an E39 M5? My relationship with the local BMW Indy isn’t that good, nor is the one with my local petrol station.

Plus, I can just imagine my employer’s reaction if I flagrantly disregarded our company car policy and rocked up in a 20 year old BMW M car.

In my experience employers are happy to ignore their own rules if you’re doing a decent job.

Apart from when I was 21 and company car tax was lower than my insurance premium, I don’t think I’ve ever been compliant with the car allowance rules.
.

Perhaps you’ve been lucky

In my experience, it’s nothing to do with the quality of your work and every bit to do with how ‘by the book’ the powers that be are.

In a corporate world, like it or not, sustainability is high on the agenda. Again, with this in mind, I can imagine the faces when I rock up in an M5.

The point is, running an older car isn’t possible or practical for a lot of people who take an allowance.

[theboss]

I run an “old” M5, a 2015 F10 with 153k good miles now on the clock so 2 generations and 15 years newer than an E39. Running costs are fairly substantial.

I also have a leased company e-tron and also a Mini EV for the wife although I drive it too.

The EVs soak up all the day to day utility miles, currently approx 500 miles a week just running around after kids/teenagers. Loads of cold starts and daily abuse whilst costing peanuts on the off peak 7.5p

The M5 is fabulous still but gets reserved now for “proper” journeys generally long haul Euro stuff, this year already it has 4 in the diary. Its “only” a leggy old M5 but the thought of using it as a daily school / shopping slag when a company funded EV can do it all for nothing is sacrilege.

[TheDrownedApe]

just found a bargain if anyone fancies it only 73% over 3 years

[J1990]

TheDrownedApe said:

just found a bargain if anyone fancies it only 73% over 3 years

Even at that awkward effective 60% tax you'd be losing £800/month net, let alone pension contribution losses. I wonder if that's a misprice or if they're genuinely thinking they'll shift some at that rate.

[SWoll]

TheDrownedApe said:

just found a bargain if anyone fancies it only 73% over 3 years

I think I'll pass. Even at the NET price that's absolutely ridiculous.

Saying that, try running a quote for a similarly sized and not much more expensive EQS 450 SUV.

[jgrewal]

What company is that doing the EX90? It is a beast!

[PushedDover]

TheDrownedApe said:

just found a bargain if anyone fancies it only 73% over 3 years

£100k car in a 24,000mile a year pricing - not many cars of £100k can withstand that kind of beating in a depreciation

Alt view - what £100k car would burn in fuel over 72,000miles, versus electricity costs? And maintenance.

[SWoll]

PushedDover said:

£100k car in a 24,000mile a year pricing - not many cars of £100k can withstand that kind of beating in a depreciation

Alt view - what £100k car would burn in fuel over 72,000miles, versus electricity costs? And maintenance.

That' 24k in total I'd assume, so 8k miles per year. Hence the 36 months, 24k miles summary.

[Basil Brush]

SWoll said:

TheDrownedApe said:

just found a bargain if anyone fancies it only 73% over 3 years

I think I'll pass. Even at the NET price that's absolutely ridiculous.

Saying that, try running a quote for a similarly sized and not much more expensive EQS 450 SUV.

There you go slandering the scheme again!

[PushedDover]

SWoll said:

PushedDover said:

£100k car in a 24,000mile a year pricing - not many cars of £100k can withstand that kind of beating in a depreciation

Alt view - what £100k car would burn in fuel over 72,000miles, versus electricity costs? And maintenance.

That' 24k in total I'd assume, so 8k miles per year. Hence the 36 months, 24k miles summary.

Ahh ok.

But also a £100k Volvo in mass depreciation shocker...

[SWoll]

PushedDover said:

Ahh ok.

But also a £100k Volvo in mass depreciation shocker...

£70k over 3 years and 24k miles though? I know they're not great but jesus christ.