European fleet management specialist, Fleet Logistics International, has launched a new salary sacrifice car scheme in the UK, calculated to be 10% cheaper than conventional schemes as multi-bidding is applied to every new car via a panel of funders to find the most attractive rate for the driver.
“Salary sacrifice car schemes give fleet leasing companies access to staff in large corporations who would not normally qualify for a company car but who are, through their firm’s flexible benefits system, able to surrender a certain portion of their monthly salary in return for a benefit – in this case a brand new car, although it could also be additional pension, healthcare, childcare vouchers – anything that a firm makes available as a benefit for its employees,” said Stuart Donnelly, Chief Regional Officer for Northern Europe at Fleet Logistics.
“On the portion of salary sacrificed each month, there is no Income Tax or UK National Insurance Contribution to pay for the employee, which is a major saving. There is a Benefit in Kind tax charge to pay on the car but that is linked to its CO2 emissions.
“Therefore employees tend to select cars with as low CO2 as possible to keep their tax bills as small as possible, so that salary sacrifice car schemes naturally promote lower emitting, greener, more environmentally friendly cars. With the moves that OEMs are making to lower CO2 in Europe, more and more cars are available with CO2 of 99-120g/km – the typical levels of vehicles selected on these schemes. You can now get a BMW 3 Series with a CO2 reading of 109g/km, for example which shows the strides the OEMs have made,” said Donnelly.
Thought to be the first of its kind to be structured this way and to be introduced by a fleet management provider rather than a leasing company, the new scheme, called FleetBENEFIT, is open to any sized organization, although research suggests that the optimal size is a minimum of 500 employees.
Employees can research, identify, source and order their new vehicle online through Fleet Logistics’ Fleet.Wizard car configurator, and benefit from highly attractive rates supplied by a panel of funders.
Using Fleet Logistics’ multi-bidding solution, which has been shown to reduce acquisition costs by 8-10%, the most attractive price is selected for the employee from the prices supplied by the panel. Any savings generated in this way, can then be allocated to a fund to cover any future contingencies, such as resignation, redundancy or maternity leave.