Salary sacrifice leasing

[plfrench]

Tractor Driver said:

Can I get a sense of the generosity (or otherwise!) of my car allowance compared to others?

I’d describe myself as mid to senior management (40% tax payer) and more ‘job need’ company car than management perk. I’m doing between 12k and 15k biz miles annually.

‘Back in the day’ a company car was just that. Aside from any BIK payments, the car was entirely funded by the company and there would typically be a benchmark vehicle for each grade and perhaps the option to select a more expensive/ nicer car if the employee chipped in. If you didn’t want to pay extra, you still had a ‘free’ car.

We’ve just moved to a sal sac scheme through Tusker and I get an allowance of £500 per month per tax, which nets down to c. £300 per month. On Tusker our options are locked down to 48 months and 18k miles per annum.

Trouble is, pretty much anything that’s suitable (by that, I mean an EV with >250 miles range, preferably over 300 miles) seems to involve me chipping in at least £75 per month towards the lease cost, plus the BIK. Often, it’s closer to £150 per month, plus BIK. Not looking at exotica here, but run of the mill cars from Renault, Hyundai, Kia, Skoda etc.

Some will say that there’s nowhere else that I’d get a new car for such a small monthly outlay and I get that. Just feels that the allowance is stingy, when it won’t even cover a pretty ordinaire car without me contributing more each month…

So my question - is my monthly allowance to use towards sal sac stingy? I challenged our HR department over it and they said the allowances were already in excess of the norm as determined by their benchmarking exercise!

I'm middle management 40% within a large multi-national (200k employees) and get £450/month pre tax. This has been at this level for at least 12 years with no increase. I pointed out to HR there has been some inflation over the last 12 years particularly in leasing costs but they aren't changing it. It was a no brainer for me to opt back into the company car scheme as it would have cost me about twice as much to get the same car on salary sacrifice - also no mileage limits.

[NomadicTurbo]

plfrench said:

I'm middle management 40% within a large multi-national (200k employees) and get £450/month pre tax. This has been at this level for at least 12 years with no increase. I pointed out to HR there has been some inflation over the last 12 years particularly in leasing costs but they aren't changing it. It was a no brainer for me to opt back into the company car scheme as it would have cost me about twice as much to get the same car on salary sacrifice - also no mileage limits.

Ours hasn't been increased in the almost 6 years I've been at the company. Mileage rate was increased from 20p to 30p last year though.

Unfortunately our company removed the company car scheme in favour of SS EV

[nufcfan]

Looking at an iX3. Anyone know if Tusker are ok with fitting winter tyres?

[Tractor Driver]

nufcfan said:

Looking at an iX3. Anyone know if Tusker are ok with fitting winter tyres?

Doubt it. To the best of my knowledge, they’ll only fit ‘summer’ tyres.

[Sheepshanks]

Tractor Driver said:

Can I get a sense of the generosity (or otherwise!) of my car allowance compared to others?

I’d describe myself as mid to senior management (40% tax payer) and more ‘job need’ company car than management perk. I’m doing between 12k and 15k biz miles annually.

‘Back in the day’ a company car was just that. Aside from any BIK payments, the car was entirely funded by the company and there would typically be a benchmark vehicle for each grade and perhaps the option to select a more expensive/ nicer car if the employee chipped in. If you didn’t want to pay extra, you still had a ‘free’ car.

We’ve just moved to a sal sac scheme through Tusker and I get an allowance of £500 per month per tax, which nets down to c. £300 per month. On Tusker our options are locked down to 48 months and 18k miles per annum.

Trouble is, pretty much anything that’s suitable (by that, I mean an EV with >250 miles range, preferably over 300 miles) seems to involve me chipping in at least £75 per month towards the lease cost, plus the BIK. Often, it’s closer to £150 per month, plus BIK. Not looking at exotica here, but run of the mill cars from Renault, Hyundai, Kia, Skoda etc.

Some will say that there’s nowhere else that I’d get a new car for such a small monthly outlay and I get that. Just feels that the allowance is stingy, when it won’t even cover a pretty ordinaire car without me contributing more each month…

So my question - is my monthly allowance to use towards sal sac stingy? I challenged our HR department over it and they said the allowances were already in excess of the norm as determined by their benchmarking exercise!

I suppose the same argument- it’s costing you money - could be had over BIK on company cars. Years ago it was buttons, but it’s increased dramatically.

20 yrs ago our opt out monthly was £600, but most users were doing 30K miles per year. I think with salary sacrifice the big thing is insurance is included - we had people who couldn’t opt out as insurance costs were too high.

What would be your mileage rate for business use on a SS EV? With you doing reasonable business mileage, that might help a bit.

[Tractor Driver]

Yes, all good points.

Biz mileage is reimbursed at HMRC approved rates:

https://www.gov.uk/guidance/advisory-fuel-rates

…so that’s 9p/mile electric. If charging at home, the cost is around 3p/mile, so that’s all good. More of a problem when charging away from home at up to 79p/kWh then the 9p/mile doesn’t cut the mustard.

The view from my employer is that the over payment for home charging offsets the underpayment for use of rapid chargers at a high cost per kWh, but my way to mitigate that is choosing an EV with sufficient range to minimise away from home charging.

Current PHEV with a 2.5 petrol engine gets reimbursed for business mileage at 24p/mile. My average MPG over 55k mile is around 113mpg, so that does work out well on the HMRC approved rates, even allowing for overnight charging at 9p/kWh.

[Terry Winks]

I know some of these quotes are a bit piss fakery! But considering at the moment just as a test the cheapest quote for insurance I can get on a Taycan 4S is £1600 a year, I mean thats a big chunk a month too!

[ChocolateFrog]

Downward said:

As a newbie to 4wd cars, Assume as it’s a bit fast the front tyres will wear faster so will Tusker allow all 4 to be replaced ?

Surely it'll be the rears that wear quicker?

I've been wondering the same thing though. With over 400hp and new tyres on the rear and 80% worn on the front it's going to make it handle like a dog.

Might be worth rotating the wheels to make sure they all wear out at the same time.

[rs4al]

Been thinking about getting a new XC60 PHEV and noticed my work scheme has hybrids included, as far as PCP is concerned need to put in £5.5K deposit to match the same NET monthlies as a SS lease, so the question is, is it better to lease on a salary sacrifice than a PCP as will be £5.5K better off on the lease.

anyhow here's the figures.

SS lease

Monthly gross salary sacrifice £1,172.87
National Insurance saved on salary (£23.46)
Tax saved on salary (£527.79)
Monthly BiK £226.49
Effective net monthly cost
£848.11

PCP
£852.57 per month
Optional Final Payment
£30,966
Contract length
36 months
Total deposit
£6,000
Annual mileage
12000 mi/y
Finance Discount Contribution (FDC)
- £9,000
Purchase price including any additional accessories, if chosen (Incl. FDC)
£60,080.01
Total Amount Payable
£67,658.52
Excess Mileage Charge
14.9p
Interest rate
3.04%
APR
5.9%

[TheDrownedApe]

rs4al said:

Personally that's a lot of money for an XC60 and as it's only PHEV the BIK is still steep. I suspect that maint and insurance are included on the lease (most are) as an advantage; do you know how much yours will cost on the PCP. You also have the potential equity in the PCP to consider which might cover some of the deposit and the loss of pension stuff with the Lease.

Either way the lease looks better but still pricey. Have you looked at other cars on the lease? i know on my company there vary wildly between marques.

[rs4al]

TheDrownedApe said:

Personally that's a lot of money for an XC60 and as it's only PHEV the BIK is still steep. I suspect that maint and insurance are included on the lease (most are) as an advantage; do you know how much yours will cost on the PCP. You also have the potential equity in the PCP to consider which might cover some of the deposit and the loss of pension stuff with the Lease.

Either way the lease looks better but still pricey. Have you looked at other cars on the lease? i know on my company there vary wildly between marques.

What I'm struggling with is the total cost to me and this is where the lease wins, yes I don't have any equity left after 2 years but in reality probably only have £1-2k in the PCP at 3 years, if I'm lucky.

My SS scheme, does not affect my pension contributions, and it's a fully inclusive package and as I drive about 15K miles pa, having the servicing included saves a bit too.

[m3jappa]

We just ordered an i4 m50 earlier this week. 35 week lead time apparently.

A day or so later a new facelift version has been announced. I understand that sometimes with a facelift comes a price lift (although one article i found indicated a slightly lower rrp)

Facelift i understand is from July.

So how would that work? I can only assume that with such a long lead time you would receive the facelift. But at what price? How do things like spec work if parts of it have changed (for example colour).

I will get my wife to call them at some stage but i would be surprised if the person on the phone really knew.

[TheDrownedApe]

m3jappa said:

We just ordered an i4 m50 earlier this week. 35 week lead time apparently.

A day or so later a new facelift version has been announced. I understand that sometimes with a facelift comes a price lift (although one article i found indicated a slightly lower rrp)

Facelift i understand is from July.

So how would that work? I can only assume that with such a long lead time you would receive the facelift. But at what price? How do things like spec work if parts of it have changed (for example colour).

I will get my wife to call them at some stage but i would be surprised if the person on the phone really knew.

My c40 had 3 major changes during the 9 months I had it on order. No one knew as it was "the spec will change when they use all the old bits up". I only knew once the car was at the dealers and unfortunately I got the one i ordered. I did try to delay my delivery by a month but that didn't help; although it could be an option for you?

[Zj2002]

ChocolateFrog said:

Downward said:

As a newbie to 4wd cars, Assume as it’s a bit fast the front tyres will wear faster so will Tusker allow all 4 to be replaced ?

Surely it'll be the rears that wear quicker?

I've been wondering the same thing though. With over 400hp and new tyres on the rear and 80% worn on the front it's going to make it handle like a dog.

Might be worth rotating the wheels to make sure they all wear out at the same time.

My i4 M50 are through a full set of hankooks within 12,000 miles.

For context my previous front wheel drive A6 used to go through a set of fronts only in 12,000.

Was speaking to a BMW tech he said it was the weight rather than performance that was the reason.

[Zj2002]

m3jappa said:

We just ordered an i4 m50 earlier this week. 35 week lead time apparently.

A day or so later a new facelift version has been announced. I understand that sometimes with a facelift comes a price lift (although one article i found indicated a slightly lower rrp)

Facelift i understand is from July.

So how would that work? I can only assume that with such a long lead time you would receive the facelift. But at what price? How do things like spec work if parts of it have changed (for example colour).

I will get my wife to call them at some stage but i would be surprised if the person on the phone really knew.

I waited 13 months for an M50 via Zenith and the price was protected. The list price and also leasing prices rose quite a bit in the meantime but I was insulated.

The only issue was that I was told last minute that I would need to forego the 20” wheels due to a lack of stock. I tried to add additional options instead but that would hane required a requote so I went for bog standard.

[oop north]

Zj2002 said:

ChocolateFrog said:

Downward said:

As a newbie to 4wd cars, Assume as it’s a bit fast the front tyres will wear faster so will Tusker allow all 4 to be replaced ?

Surely it'll be the rears that wear quicker?

I've been wondering the same thing though. With over 400hp and new tyres on the rear and 80% worn on the front it's going to make it handle like a dog.

Might be worth rotating the wheels to make sure they all wear out at the same time.

My i4 M50 are through a full set of hankooks within 12,000 miles.

For context my previous front wheel drive A6 used to go through a set of fronts only in 12,000.

Was speaking to a BMW tech he said it was the weight rather than performance that was the reason.

It’s not just weight - I had a discovery 4 that managed 30k + miles on a set of tyres and they still had plenty of life left. My Jaguar iPace had enough tread left after 29k miles to me not to need to replace them before it went back. My wife’s c40 at 17k miles has loads of tread on all four tyres but my iX at 18k miles needs a new pair of rears, the fronts are fine. My wife had an original xc90 that needed a full set of new tyres every 11k miles. I had a2017 xc90 for a year that showed little sign of wear after 12k miles

[PistonTim]

rs4al said:

Been thinking about getting a new XC60 PHEV and noticed my work scheme has hybrids included, as far as PCP is concerned need to put in £5.5K deposit to match the same NET monthlies as a SS lease, so the question is, is it better to lease on a salary sacrifice than a PCP as will be £5.5K better off on the lease.

anyhow here's the figures.

SS lease

Monthly gross salary sacrifice £1,172.87
National Insurance saved on salary (£23.46)
Tax saved on salary (£527.79)
Monthly BiK £226.49
Effective net monthly cost
£848.11

PCP
£852.57 per month
Optional Final Payment
£30,966
Contract length
36 months
Total deposit
£6,000
Annual mileage
12000 mi/y
Finance Discount Contribution (FDC)
- £9,000
Purchase price including any additional accessories, if chosen (Incl. FDC)
£60,080.01
Total Amount Payable
£67,658.52
Excess Mileage Charge
14.9p
Interest rate
3.04%
APR
5.9%

Most salary sacrifice deals including insurance, servicing, maintenance, repairs, tyres etc - have you checked? Makes a big difference to the sums.

With BIK though personally I wouldnt SS a hybrid.

[m3jappa]

PistonTim said:

Most salary sacrifice deals including insurance, servicing, maintenance, repairs, tyres etc - have you checked? Makes a big difference to the sums.

With BIK though personally I wouldnt SS a hybrid.

Exactly this. As above the mrs has ordered an m50 for 719 a month. A figure which i would never consider for a monthly repayment. That was until you minus
No deposit
insurance
tyres
service
maintenance

It works out roughly to the m50 costing around 350-400 a month. which is substantially cheaper than anything close to comparable.

[m3jappa]

TheDrownedApe said:

m3jappa said:

We just ordered an i4 m50 earlier this week. 35 week lead time apparently.

A day or so later a new facelift version has been announced. I understand that sometimes with a facelift comes a price lift (although one article i found indicated a slightly lower rrp)

Facelift i understand is from July.

So how would that work? I can only assume that with such a long lead time you would receive the facelift. But at what price? How do things like spec work if parts of it have changed (for example colour).

I will get my wife to call them at some stage but i would be surprised if the person on the phone really knew.

My c40 had 3 major changes during the 9 months I had it on order. No one knew as it was "the spec will change when they use all the old bits up". I only knew once the car was at the dealers and unfortunately I got the one i ordered. I did try to delay my delivery by a month but that didn't help; although it could be an option for you?

Umm, we will see what happens then i suppose. would be a bit gutted to receive a pre facelift car 6 months after the facelift model is released and then have to have it for 4 years.... real first world problems though

[riskyj]

m3jappa said:

Exactly this. As above the mrs has ordered an m50 for 719 a month. A figure which i would never consider for a monthly repayment. That was until you minus
No deposit
insurance
tyres
service
maintenance

It works out roughly to the m50 costing around 350-400 a month. which is substantially cheaper than anything close to comparable.

That sounds like a cracking price. Who is her provider?