Salary Sacrifice Car Leasing Explained - What is Salary Sacrifice? - YouTube

this is a video i've had lots of requests for  but it's a very very difficult one to make  

the main reason for that is it's very difficult  to get quotes for a salary sacrificed car  

if you're not already part of a salary sacrifice  scheme so for this video i'm using a private lease  

quote from lease loco other leasing websites  are available and then i'm comparing that to  

something from one of the least companies  which is just an example that they give you  

so it's not particularly tailored it's not  particularly accurate but hopefully it gives  

you a good idea of how salary sacrifice  works and maybe if it's for you or not  

if it's something you should think about if it's  available with your employer so let's check it out

so we're going to get into the nuts and bolts  of it in a sec where i'm going to show you the  

two different sites and have a chat about it in  general but on a high level salary sacrifice is  

where you choose not to take a portion of your  salary and that goes towards a benefit instead  

in this case a car an electric car actually will  explain why it needs to be electric in a minute  

you might think that's bananas why would i give  away some of my salary well you're giving it away  

because it means you're not getting taxed on it  you're not paying tax on national insurance on  

money because you haven't had it the company is  actually using that to get you a car instead now  

what that means is you have to pay company car tax  and this is why it's important that you get an ev  

because benefiting kind on evs at the moment is  very low so the amount you pay is very very low  

i did do a video on company car tax and uh the  complexities around that so go and check that  

out there's a link popping in the top corner  now the difference between a salary sacrifice  

lease and a private lease is generally the salary  sacrifice lease is almost always fully maintained  

it's almost always fully insured you don't usually  pay a deposit and sometimes it includes something  

called lever protection that means if you leave  your job you give the car back it doesn't always  

include that but usually does and that protects  you and the employer the employer is not left  

with a company car that they're paying for  every month but don't have someone to sit in it  

and for you if you lose your job or you  leave your job you're not stuck with a car  

that you needed for that job potentially or  maybe you can no longer afford to run or maybe  

you're earning a lot more money and you want  a nicer car so it's a nice flexible thing for  

kind of everyone you can only get one of these if  your employer does a salary sacrifice scheme and  

lots of employers don't but if a salary sacrifice  scheme is available with your employer do check  

it out because it's well worth having a look at  as i said i haven't made this video previously  

because it's so difficult to get good examples and  fair examples and comparisons but i'm just going  

to try here with a fairly high level thing what i  would suggest you do is if your employer does have  

a salary sacrifice scheme get yourself a quote  for a car that you're really interested in and  

then go on to lease loco other leasing websites  are available run the same conditions on that  

and just bear in mind that that one's not going  to be insured and maintained and all that sort  

of stuff just compare them and see which  one works out best certainly if you're a 40  

taxpayer that you should see a significant saving  in going down the salary sacrifice route but of  

course it's not available to everyone everyone's  situation and circumstances are different so all  

i can really say is if your company has a salary  sacrifice scheme look into it right let's have a  

look at the example okay so just to get started  here i'm just going to look at the best deal i  

can find on a tesla model 3 standard range plus  on lease loco and that's simply because that's the  

one i can find an example of on some documentation  for a salary sacrifice and that one is a nothing  

up front four years eight thousand mile a  year deal so that's what we're looking at here  

looking at nothing up front and then 512 pounds a  month this is non-maintained non-insured nothing  

else okay so 512 quid a month then if you factor  in something for your insurance maybe another  

50 60 quid a month depends on where you live your  age your driving experience all that kind of stuff  

and then you've got fact something in for your  services next to nothing on a tesla visit but  

you're gonna have to affect some of them for  tyres entire rotation which you should do  

after so many miles so just completely off  the top of my head say 600 pounds a month  

if you were to do a personal release insure it  and look after yourself this is not science as  

you can tell it's very difficult to do because  there are so many variables just things like  

the cost of insurance make a massive difference so  i'm just trying to give you a very general idea of  

what salary sacrificing is all about so octopus do  salary sacrifice schemes and this is their sort of  

prospectus if you like their sales document this  is not an accurate quote that you might get today  

or tomorrow this is a very general example they're  giving you but you've got to think it's going to  

be around about this sort of ballpark figure  maybe it's going to be 50 quid one way or the  

other but with this one this person's earning 80  000 pounds a year so they're a 40 taxpayer which  

is an important part to remember and this includes  insurance and accident management services  

maintenance and repair roadside assistance tyre  replacement due to wear and tear early termination  

protections for unforeseen circumstances and five  and a 500 pound end of contract damage waiver  

so if the damage on the car when it goes back  it's under 500 quid they don't charge you anything  

and this is basically how it works so the  gross sacrifice so the amount of salary that  

this julia is losing every month is 752 quid  and the net difference in her pay is 450 quid  

that's basically a tax a national insurance saving  of 316 pounds a month you see the benefit in kind  

changes each year so this year it's one percent  but from next year would be two percent so that's  

how much benefit and kind you're paying every  month so with this she's got every month she's got  

her tesla it's taxed it's insured it's maintained  protection if she loses her job or she leaves her  

job and there's a little bit of damage allowed  when the car goes back and it's costing her  

450 quid a month that's how much worse off she is  from her salary so although she's losing 752 quid  

of her salary it's costing her 450 quid a month  when all said and done you may think amazing i'll  

just go and do that job done there's a there's  a salary sacrifice game at work i'm gonna go and  

do it on the face of things if there's a salary  sacrifice scheme at your work and you want an ev  

you should look into it job done like full stop  definitely because it can be a really really  

cheap way of getting yourself in a car it can be  cheaper than doing a personal lease and insuring  

itself and maintaining it however you're losing  that bit of your salary when it comes to things  

like declarations for mortgage applications and  finance applications so if you're cutting it a bit  

fine as to what you can afford on a mortgage when  they do the affordability checker and they ask for  

your salary their lending calculators and things  like that this might not be a good idea for you  

you really need to give that some consideration  because if you earn say 50 000 pounds a year at  

the moment and you want to get a mortgage on that  and they're going to use x times your salary to  

calculate how much they're prepared to lend you  on a mortgage and you suddenly are earning 752  

a month so you're earning 9 grand less in the  eyes of the lender well they're going to do 41 000  

times however many to decide how much  they're going to lend you on a mortgage  

do you see where i'm coming from so although  it may be a great way of getting yourself in  

a car a bit cheaper it might not help you if you  want to go and buy a bigger house or buy a house  

just think about that but on the face of it  if if you're not worried about that side of  

things if you're not worried about mortgages  and things like that and your employer has  

a salary sacrifice scheme for evs then you should  definitely get a quote on it jump onto lease loco  

other leasing websites are available and see  what you can get on a personal deal private deal  

and just compare them it makes a lot of sense to  go with one of these if they're available but it's  

not going to be the answer to everyone i can't  believe i haven't asked you yet but give the video  

a thumbs up will you guys it helps and if you  haven't already subscribed to my channel please  

do so we've got more of the least deals of the  month videos coming up don't forget we do three of  

those every month now let me know what you thought  of this as i said i haven't been able to go into a  

ton of detail and i haven't been able to make this  massively accurate because i don't have a salary  

sacrifice scheme that i can compare it with that  may change in future and if it does i'll make an  

update video but for now i hope you enjoyed that  one let me know what you think in the comments  

and go and check this video out next because  maybe just maybe you'll like it see you next time