Salary sacrifice car - is it worth it?

[BadActors]

Hello all

DH can get a car through his employer’s salary sacrifice scheme. One of our cars has just died and it looks more cost effective to get a new one than to repair it.
I don’t know loads about salary sacrifice, although we’ve read up on it a bit. Has anyone done this before and was it worth it? I’d love to hear if you think it’s a bad idea, or if it’s fine to do for a couple of years.

Thanks

Youll save money leasing via Salary sacrifice but really only for fully electric vehicles.
The benefit in kind tax on other cars is too high to make it worthwhile.
If a 40% tax payer, because the deduction comes out pre tax you will save 42% on lease costs. The benefit in kind charge is then the list price of the car x3% (currently) then at your tax rate. So a £50k car would be around £50 per month in tax.
Petrol and diesel cars (and even hybrids) have a much higher BIK %

Thanks. It’s a fully electric car I’m looking at so we’ll definitely add this to our list of options.

One thing to be aware of is don’t go down to the wire with what you can afford, because you are not completely in control of it. Tax rate can change. BIK rate can change.

Also (very important) be aware that you are committing to the FULL period of the lease, and if he leaves his job, voluntarily or through redundancy, you might be made to buy the car.

That said, I lease our cars as salary sacrifice and it is very much worth it for us.

My new (electric) salary sacrifice car is coming on Thursday! It’s going to work out £150 a month cheaper by the time you factor in insurance being included in the monthly charge. In fact given that they cover almost all running costs apart from the electricity, it will be even cheaper over a year as we won’t have to pay for tyres, general wear and tear etc. The only thing I’m responsible for is the insurance excess if I have an accident. It looks like a good deal for me - you’d need to get a quote and see how it works out for your family.

It’s probably worth saying that I work for a local authority and there’s a no compulsory redundancies agreement in place, so I’m not worried about being made redundant. I’m also not likely to want to leave in the next 5 years.

I did it for years. It wasn’t the cheapest way to run a car in the long run (which I knew), but for me it was the most convenient way of getting a reliable car, and I liked that it was a fixed monthly payment which covered absolutely everything. I saved a little bit each month as I knew I wouldn’t want to lease forever (affect on pension) and eventually bought my last leased car outright at the end of the agreement. The price offered was pretty good value compared to buying similar vehicles second hand, and I knew the car had only had one previous careful driver -me! I have no regrets about doing it.

Check what is included in your DHs scheme.

I salary sacrifice my car, and my employer also covers the cost for:

Services
MOT
Repairs
Tyres
Insurance

It will also reduce your taxable income so will have a tax saving too.

When I was researching a new car, I put the monthly cost into a salary calculator to see what Impact it would have on my take home pay.