EV salary sacrifice broker LoveElectric has launched a ‘zero-risk guarantee’ for employers, hoping to encourage more uptake of these schemes as cheaper new and used EVs make them accessible to lower-income drivers.
The UK’s ‘salsac’ market is booming. It enables drivers to lease a car through their employer, often with a discount, and pay for it with their pre-tax salary. If the CO2 emissions are 75g/km or less (a threshold that excludes anything without a plug), they’re then taxed on their remaining income plus low-rate benefit-in-kind (BIK) for the car.
It has become a desirable product. LoveElectric claims 60% lower EV costs compared with leasing privately, encouraging staff loyalty while supporting employers’ sustainability targets.
The British Vehicle Rental and Leasing Association (BVRLA) members’ combined salary sacrifice fleet grew to almost 100,000 vehicles last year – a 51% rise – and 87% of new deliveries are electric.
With BIK incentives confirmed to 2030 and cheaper EVs on the horizon, LoveElectric CEO Steve Tigar sees “enormous growth potential” ahead.
Some new electric cars – such as the Vauxhall Frontera – have reached price parity with their ICE counterparts, while demand for the company’s ‘Reloved’ salary sacrifice scheme for used vehicles is rising.
Those price reductions are critical, because drivers are excluded from salary sacrifice schemes if the monthly rental cost would take their remaining salary under the minimum wage threshold.
“We’ve seen the demand for second-hand EVs grow exponentially,” said Tigar. “With used EVs, we’ve reduced the required salary threshold to around £27,000, compared to £36,000 for a brand-new car. Used EVs now account for around 40% of total submitted orders, which we expect to only increase as we get further into 2025.
“For one company, our huge range of used EVs was the main reason they chose us over other providers. Since they’ve launched the scheme to their employees, used EVs have accounted for 82% of [their] total orders.”
The ‘zero-risk guarantee’ follows customer research and is designed to alleviate another barrier by protecting businesses against early termination fees – which can be 50% of the remaining lease costs – if employees resign, are made redundant or take long-term leave. It’s optional; applies from day one, instead of after three to six months; and includes used vehicles too.
“Our [customers] already benefit from robust early termination protection, covering employers against unexpected financial hits,” explained Tigar.
