5 Benefits of Applying for a Salary Sacrifice Car scheme 

Imagine driving a new car of your choice every few years. This is exactly what a salary sacrifice car scheme offers you. Salary sacrifice schemes are becoming more widespread, after the changes in April 2007 to allow all employers to offer this benefit were introduced – prior to this, only larger companies could do so. Purchasing a car is a big investment that is worthwhile.

Who to choose for a salary sacrifice car scheme?

Fleet Evolution’s award-winning salary sacrifice car scheme can help an employee and an employer save money. From general employees accessing green products at vastly reduced rates through our excellent salary sacrifice scheme, or essential users going green to benefit the planet and everybody’s pocket, at Fleet Evolution, you can save both money and the earth with our amazing offers.  Their mission is to get as many people as possible into green cars.

Fleetevolution.com A quote from Andrew Leech from Fleet Evolution “Happy employees, happy employer, happy planet! Whether you employ 3 people or 10,000”.

Their customer service team can advise you on the best autos, schemes, and solutions for you. so why not set up your scheme free today on 0300 302 0626 or check their website here https://www.fleetevolution.com/salary-sacrifice-cars-how-do-they-work/ 

What is a salary sacrifice scheme?

A salary sacrifice happens when an employee gives up the right to receive part of his/her pay, usually in return for the employer providing some form of non-cash benefit. The advantage to the employee is that they will pay lower national insurance contributions; the employer also saves on its national insurance contribution. All employees can apply for a salary sacrifice car scheme if they have been employed by the company for over three months.

Salary sacrifice cars how do they work?

A salary sacrifice car works in the same way as a salary exchange scheme. An employee gives up part of their salary for a company car or allowance towards one, or both, allowing them to buy or lease a new car at a reduced cost.

An employee will have a contract with their employer where they agree to swap a certain amount of their salary for a non-cash benefit such as a company car. The difference between the old and new net take-home pay is the amount that is sacrificed and counts as additional taxable earnings. However, all income tax and National Insurance Contributions (NIC) are frozen at the date of the salary sacrifice.

Purchasing a car through salary sacrifice has several advantages, including the fact that an employee will not need to pay any income or capital gains tax on their company car.

Who can apply for a salary sacrifice car scheme?

All employees who have been employed by the company for over three months can apply for a salary sacrifice car scheme. The employee should not be receiving any salary during their notice period, although they can still apply for one.

 5 Benefits of applying for a salary sacrifice scheme at Fleet Evolutions

   1. Affordable monthly payment plan

Salary sacrifice cars are often offered on a contract lease plan because it helps keep the cost of the car more affordable than an outright purchase. If you decide to buy the car at the end of your salary sacrifice agreement there is no mileage limit, but if you want to drive further then an unlimited mileage contract might be best for you.

   2. Tax savings

An employer also benefits from a salary sacrifice scheme because it can lead to significant tax and national insurance (NI) savings, as well as saving money on the administration of ongoing car benefits claims. Employers need to work hard to ensure that their salary sacrifice schemes offer an effective benefit proposition – and with the right provider and model, they can make a significant difference to their tax and NI liability.

   3. Additional benefits

Many companies offer additional perks with their salary sacrifice schemes. Introductory offers such as complimentary breakdown assistance or mobile phone insurance are often given during the first 12 months of owning the car as an extra incentive for employees to join. This can help to increase employee satisfaction and retention, as well as encourage new recruits.

   4. Free choice of car and colour

Some salary sacrifice schemes offer the option to choose the make and model of the company car – often from a list of approved models – or even let employees choose their own car if it happens to be on the list.

   5. Flexibility of scheme

Employees have the flexibility to exchange part or all of their salary for a company car, with different models offering varying degrees of sacrifice. A 100 percent sacrifice means employees give up the entire value of the car in salaried income over the contract term, whereas some schemes are structured so managers can choose how much of their salary to sacrifice.

Do you own the car at the end of salary sacrifice?

When you reach the settlement of your salary sacrifice agreement, you will own the car and meet any final payments to end the contract. You can then use it as a personal vehicle or sell it – but if you want to keep driving the same model for business purposes, everything is held in one place and you simply maintain your lease agreement with your company.

It is also possible to return the car at the end of your agreement and transfer any equity you have built up to a new company vehicle within the same scheme. You can then choose whether you want to upgrade or downgrade, as well as decide on the make and model that best suits you. Your salary sacrifice car will usually be held for between six and 36 months, after which you will own the car.

How to look after a company car?

If you’re looking after your company car, it will look after you in return. A clean interior and exterior can help to boost resale value when the agreement ends and reduce the amount of money that needs to be spent on maintenance. Just don’t go too crazy with the cleaning products – there is a chance they could damage any paintwork or interior finishes.

Regular servicing will help you to keep your MPG high, with the engine in good condition. You must also make sure that tires are inflated correctly and brakes are working efficiently.

Just remember, if an accident has been caused by you or a fault has occurred due to lack of maintenance, you may be liable for repair costs and any excesses that might apply. Occasionally, the company may also charge you a contribution towards the replacement of an aftermarket part!


To conclude, the benefits of salary sacrifice schemes are numerous, whether you’re looking at company cars or van hire. With careful planning and advice, a salary sacrifice scheme from Fleet Evolution’s could help you to achieve your goals for both business and personal use – while being more affordable than going it alone. As with any financial decision, a full understanding of the costs and benefits will ensure you have the correct information to make the right decision.

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