83% of companies plan to offer an electric car salary sacrifice scheme in 2024.
Concerns remain about cost and risk to business of implementation
Survey of 250 managing directors, finance directors, and HR directors
83% of respondents plan to offer an electric car salary sacrifice scheme in 2024
47% plan to implement one in the first half of 2024
16% already have one in place at their business
A NEW survey of 250 managing directors, finance directors, and HR directors found that demand for salary sacrifice – the funding method of the moment – is sky high.
The BVRLA’s latest Leasing Outlook survey (October 2023) reported that salary sacrifice had grown a substantial 54.6% year-on-year – or more than than 55,000 cars.
This latest salary sacrifice report undertaken by The Electric Car Scheme – a partner company to Gateway2Lease – demonstrates that growth in the funding method is unlikely to diminish, with 83% of the 250 respondents saying they planned to implement salary sacrifice in the next year.
However, there remain a number of potential misconceptions which might roadblock uptake:
- 89% of directors believe it would cost them money to run an electric car scheme
- 90% believe there is significant risk to the company by having a scheme (if an employee leaves or is made redundant).
However, according to CEO and Co-Founder Thom Groot “this is a misconception”, adding that there is no direct cost to business to run an electric car scheme, and through The Electric Car Scheme, there is no risk to the company should an enrolled employee leave.
This perceived cost is key in the decisions of directors, said the report. When asked to rank the importance of four considerations when implementing an employee benefit, cost came out on top. This was followed by the benefit to the employee, the risk to the business and finally the effort it takes to set up.
There is tremendous demand for electric cars through salary sacrifice, which is rising all the time. It is no surprise to see that 2024 is set to be a landmark year for the scheme. This is a sought after benefit, and one that can make a big difference in both talent attraction and retention, and HR directors clearly realise this with plans to stay ahead of the curve in the works.
Other key data points from the salary sacrifice survey
• 55% already have a cycle to work scheme.
• 89% believe it would cost them money to run an electric car scheme.
• 90% believe there is significant risk to the company (i.e. if an employee leaves or is made redundant).
• 74% believe it would take a considerable amount of work internally to implement an electric car scheme.
Ranking of most important considerations when considering implementing a new employee benefit.
- Cost to set up and run the scheme.
- Benefits provided to employees.
- Risk to the business when running the scheme.
- Amount of work required to set up and run the scheme.
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Ralph Morton is the leading journalist in the leasing broker sector and editor of Broker News, the website which provides information and news for BVRLA-registered leasing brokers. He also writes extensively on the fleet and leasing market in both the UK and Europe.
