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Andrew Leech
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82% Are First-Time New Car Drivers
Analysis by Fleet Evolution has found that over 80% of eligible employees who joined one of its salary sacrifice car schemes were selecting their first ever new car through salary sacrifice.
The Tamworth-based salary sacrifice and fleet management specialist found that 82% of employees had never owned a new car before. Most were 20%, not 40%, taxpayers – dispelling the myth that salary sacrifice car schemes are only effective for well-paid staff who regularly change their cars.
This points to a growing trend: employees with moderate incomes are increasingly able to access new, fully electric vehicles thanks to structured, tax-efficient schemes.
Electric Cars Dominate Choices
n the overwhelming majority of cases, employees joining a Fleet Evolution car scheme chose an electric car – just 2% selected a hybrid. This clearly underlines the effectiveness of salary sacrifice car schemes in supporting green mobility, particularly for employees looking to reduce their environmental impact.
BIK Tax Incentives Drive Interest
A key factor in the decision-making process was the very low prevailing Benefit-in-Kind (BIK) tax rates on new electric cars, with current BIK rates at 3% and rising only slightly to 4% in 2026/27.
This, combined with the increasing variety of affordable electric cars entering the UK market, makes electric vehicles increasingly appealing to employees at all income levels.
“There is this misconception that salary sacrifice car schemes only work for very well-paid employees. But that is not the reality. Salary sacrifice has made a new car affordable for many lower paid employees, in many cases for the first time,“ said Fleet Evolution founder and managing director, Andrew Leech.
All-Inclusive Running Costs Appeal to All Income Levels
“Even the lower paid can benefit from a scheme’s advantages, which include all servicing, tyres, breakdown cover, road fund licence and fully comprehensive insurance,” he added. These fully bundled packages make electric cars significantly easier to manage financially, eliminating many of the hidden or unexpected costs of car ownership.
New Government Grant Could Increase Uptake Further
Leech said that the Government’s recently announced Electric Car Grant (ECG) of between £3,750 and £1,500 would have a dramatic impact on the affordability of electric cars within salary sacrifice car schemes, making them more accessible still.
“We calculate that the ECG will make electric cars around £50 net cheaper per month. But at the moment we cannot advise customers as to which manufacturers’ vehicles will be included within the grant, as we are as much in the dark as they are.”
Employers Introducing the Scheme
Employees Going Green
MG4 Most Popular Model for First-Time Drivers
Leech went on to say that the most popular electric car for first-time buyers/lessees through the scheme was the MG4.
“It represents a very attractive package with a high specification and a genuine 200-plus electric mileage,” he said.
Fleet Evolution calculates that employees earning as little as £32,000 can comfortably afford an electric car on salary sacrifice – a significant milestone for vehicle accessibility.
A Call for Government to Reassess Rules
Current rules for salary sacrifice schemes state that employees cannot enter into a scheme for any assets if the amount of salary sacrificed takes their take-home pay below the minimum living wage.
However, Fleet Evolution has been lobbying the government to amend these rules, arguing that the current laws discriminate against the very people they aim to protect.
“We would like Government to make a minor adjustment to the current rules with a caveat which states that the minimum living wage threshold remains in force, unless the employee opts for and agrees to a beneficial salary sacrifice arrangement which takes them below that level. That would open up electric car ownership to even more prospective employees,” said Leech.
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Fleet Evolution offers innovative salary sacrifice schemes, helping employers and employees save on costs while promoting eco-friendly electric cars. Enjoy easy setup, free maintenance, and swift activation for any company size.