ONE THOUSAND units in your first year of trading: that’s some run rate.
For a broker that’s really good going; for an Appointed Representative (AR) that’s quite exceptional. But that’s exactly what The Electric Car Scheme and Gateway2Lease did in their first year after partnering up in 2022.
Based in Hayes, west London, the team now runs to 41 staff headed by Thom Groot (CEO) and Tom Eilon (COO). And yet, unless you’re in the salary sacrifice space – where you will have definitely come up against them – they’re a broker you’ve possibly never heard of.
Not that The Electric Car Scheme intended to be a broker. The business started in 2020 – coinciding with Covid – so trading conditions were hardly ideal. But both Thom and Tom had decided that the tax advantages of an electric vehicle were outstanding, but only if you were a company car driver.
What, though, if you could offer an electric car through salary sacrifice?
“We started working with a number of brokers but found the quality was very varied and it became hard to manage,” explains Thom.
We knew we were good on the tax side, so why not partner with a really good broker that had good customer focus, had all the OEMs and all the funders?
It was at this point in the company’s development that they met Rob and Kelly Marshall from Gateway2Lease. “We get the best prices and great customer experience from the Gateway2Lease team while we can then focus on the customer side. We value what Rob and Kelly bring – and vice versa.”
Thom says it took a nine month period to transition to a Gateway2Lease AR, and the resulting trial phase then went well.
Thom says the sales success as a result is due to the complementary skillsets of both parties.
“Tax and HR law is complicated and way beyond what a normal broker can do, while the level of customer service is very different from transactional broking.”
So far the business has attracted £4m in equity funding from green backers in three rounds of funding, which included family and friends in round one.
“We’re focused on growth and getting businesses in the UK signed up, because more and more companies want to go the salsac route. Our average company size is 100 employees. At some stage they will all want an electric car.”
Who are Thom and Tom?
Thom Groot (right) and Tom Eilon both met at university where they also met their respective wives. So they’ve known each other for 15 years, although they only started working together three years ago.
Thom is from the Netherlands where he worked in consulting before moving to the AA. There he led its digital transformation which included car leasing. So he is used to leading big teams and digital builds.
Tom Eilon’s background was at Funding Circle – a finance provider for SMEs – so he knows the credit space well, and how to support SME companies.
They are partnered by family run leasing broker Gateway2Lease led by Kelly Marshall (managing director) and Rob Marshall (operations director).
Thom says that the biggest barrier to salary sacrifice adoption is the early termination issues. “It’s a big blocker and you need to find solutions,” says Thom. “So you need to remove it as a barrier to adoption.”
He says the company’s risk protection service takes away the barrier – which includes redundancy and dismissal, resignation and, uniquely, protects against family long term sickness from the start.
“We spend a lot of time on this to make sure it’s the best on the market. So this is free with every car. It’s part of the service and not optional. It’s provided through the employer NI and tax savings.”
Thom sees the partnership with Gateway2Lease as crucial for the company’s expansion in the market.
Bigger salsac players such as Tusker and Octopus have a different business profile. They self-fund so go conservative on the RVs making the cars more expensive for employees. We have more flexibility and keener prices through Gateway2Lease.
But salary sacrifice is only part of the picture for The Electric Car Scheme.
“We see the opportunity extend beyond cars to heating and other carbon emissions where we believe there is a similarity in the switch to EVs . Where there are government incentives there’s always complexity. We see it as an opportunity to work on net zero goals.”
In the meantime, The Electric Car Scheme is looking to double its sales in 2023 – and the company’s current trajectory suggests this is within easy reach.
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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.
