Tusker has seen an increase in car orders, exceeding its targets for the first few months of 2017.
The Autumn Statement last November detailed a change to salary sacrifice; that those who choose a salary sacrifice car will pay tax on the greater of the taxable value of the vehicle or the salary being sacrificed. Ultra-Low Emission Cars with CO2 up to 75g/km are exempt from the new rules, which only come into force for new car orders from the 6th April this year. Existing contracts are protected until April 2021.
According to Tusker’s survey, only 3% of drivers entered the scheme because of tax savings. The vast majority, 77%, chose their car because of the all-inclusive package. Salary sacrifice car schemes have an all-inclusive fixed cost structure, giving drivers the peace of mind that they can budget accurately for all their motoring costs. Also in the survey, many employees acknowledged the fact that because maintenance and repairs are included they never have to worry about unforeseen garage costs.
The survey also found that drivers particularly liked the fact that there are no initial deposits or credit checks, the scheme is easy to join and that by going through Tusker they have access to great corporate discounts. The tax efficiencies actually ranked at the bottom of the list of possible benefits to the driver in the survey.
Across the thousands of cars that Tusker delivered on schemes last year, if the same cars were ordered after the April 5th deadline, more than half would not be affected by the Government’s changes; either because the cars were ULEVs or because the drivers are already paying more in Benefit in Kind (BiK) than tax on the salary being sacrificed. Of the remaining vehicles, over a quarter would only see an average increase of just over £2 a month.
Paul Gilshan, chief marketing officer at Tusker said: “Our survey has clearly demonstrated that the success of salary sacrifice cars lies in their simplicity of offering all-inclusive fixed cost motoring. The tax efficiencies are still there, and can certainly make some cars more cost effective, but for our drivers the most important factor remains the fact that all they have to pay above their monthly fee is the cost of fuel.”