Salary sacrifice car scheme

[Grockle]

My current car is increasingly costly - there are various issues with it and I am thinking about replacing it. It's probably worth less than £4000 now. I basically have no savings, so can't afford to buy something else outright.

I've realised we have a salary sacrifice scheme at work where I can get a car on payments taken out of my wages before tax & NI etc. I've never had a new car and always owned older cars outright. Is the salary sacrifice scheme worth it? It includes insurance, MOT, service, tax and roadside recovery etc, which probably cost me £120 a month.

Or am I better looking at other ways of paying monthly, getting a loan etc?

I’ve recently done this and traded in my 5 yr old car for a new electric one. We did the sums and it makes good financial sense for our situation. We were still paying finance on the old car so with the insurance, road tax etc saved and the reduced running costs, we’re quids in every month.

Personally, I would rather pay a set amount each month and then know that everything’s covered through the warranty than own a cheap car outright and run the risk of unexpected bills which can run to thousands.

You should be able to get an idea of your net pay impact so you can calculate if it's worthwhile for you.
It's only really beneficial with electric cars as the benefit in kind tax is much lower.
It's also better for you if you are a higher rate taxpayer as you effectively save 42% (England).
I've done it for an electric car. It costs me £500 a month effectively but includes insurance, all maintenance etc.

I've done it recently. £400 for a brand new electric car and includes full insurance for me and OH, breakdown cover, tyres, everything. New one every 3 years.