Four major lease providers - LeasePlan, Hitachi Capital Vehicle Solutions, Lex Autolease and GE Capital Solutions Fleet Services - are about to launch salary sacrifice schemes.

The country’s largest, Lex Autolease said late last year it will enter the market in 2010, while LeasePlan – number two in the FN50 – will launch its SalaryPlan in March.

These schemes make company cars available to employees who do not qualify for them in exchange for a monthly payment from their salary before tax.

“The benefits can be profound,” said Matt Dyer, commercial director at LeasePlan.

“SalaryPlan offers a solution for the employee base and cash taker population.

"The transfer of funds from a pure cash flow allowance to salary sacrifice scheme is a fundamental change.”

GE Capital – the country’s sixth largest lease provider – is introducing its scheme after consulting with its Customer Advisory Board, which found that fleet managers understand the economic argument for salary sacrifice cars “is not totally compelling,” but as GE’s Gary Killeen explained, it “appears to be the HR communities that are keen to explore salary sacrifice for cars”.

Hitachi – number 16 in the FN50 – will pilot its scheme in May opening it to 1,600 employees within the Hitachi group.

“Salary sacrifice has potential, but it is still an unknown, and is best suited to large companies,” said Simon Oliphant, Hitachi chief executive officer.

“We see this as an opportunity to replace the grey fleet with new, cleaner, safer cars.”

These new arrivals join the likes of Lombard, Masterlease, Tusker and Zenith Provecta in offering salary sacrifice schemes.

Tusker will have more than 20 schemes live by April. It has had approaches from 60-70 mainly blue chip companies and “a flood of enquiries” from public sector organisations in the last six months.

Lombard, which launched its salary sacrifice offering last spring, is also reporting growing interest.

“We are experiencing a very large increase in interest - a year ago almost no-one was talking about them but probably 50% of our major customers are now,” said Lombard’s Paulo Larkman.

Robert Kingdom of Masterlease, which has agreed six new schemes in the past six months and has been in the market for nine years, said the new companies’ arrival should not be a surprise.

“Salary sacrifice as a tool for delivering a range of benefits has grown in prominence over recent years partly through the growth in flexible employee benefits, and partly through Government-sponsored initiatives for home computers and bicycles,” he said.

“The growth in the flexible benefits culture - allowing employees to create their own reward package - has seen more organisations seeking to expand the range of benefits offered.

"Cars - by anyone's reckoning is an attractive benefit - have been one of those additional benefits considered.”

But while interest is high, uptake is often low.

Tusker says take up is typically only between 2-3% in year one, followed by 1% in years two and three.

Take-up in the most successful scheme run by Masterlease was just 15%, but typically take up is just one to 2%.

North Yorkshire County Council, which has just introduced a Tusker, is predicting take up of just 1.7% in year one.

But John Robinson, the council’s benefits and reward consultant, said these schemes are attractive, because all day-to-day operations are outsourced.

“Tusker will manage all of this,” said Robinson. “We will take the money through salary sacrifice and make payments to Tusker, but everything else is outsourced.”

This outsourcing removes many of the concerns fleet managers have about these schemes adding to their workload.

“Few if any companies wish to manage these schemes themselves,” explains Tusker managing director David Hosking.

“The point of introducing them is to increase choice, not the administrative burden.”

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