Zenith has developed a salary sacrifice tool which shows manufacturers at what level to price their cars in order to win business with each of the leasing provider’s salary sacrifice customers.

The tool reveals which make, type and size of car is most popular within an individual customer’s employee base. It was given a soft launch a year ago and is being used by a number of manufacturers to set their pricing terms.

For example, manufacturer A can see that a fleet has a large number of manufacturer B’s cars among its salary sacrifice employee base because those cars are priced at a certain level. If it wants to challenge for business, it can now offer an appropriate level of discount to make its models competitive.

Zenith has carried out a major piece of research with its salary sacrifice customers and says that this type of business is of huge value to manufacturers.

Chief executive Tim Buchan said: “Sixty-five per cent of people who ordered a new salary sacrifice car wouldn’t have consider a new car otherwise.”

For fleets, Zenith’s salary sacrifice system offers a single sign in and knows the employee’s wage and tax band so will only display models that are available under their financial circumstances.

Employees can select how much money to sacrifice monthly, set fuel type, number of doors and CO2 emissions to filter their options, or simply opt for make and model if they know what they are looking for.

The results show the car and specification, rental cost, lead time, fuel efficiency and CO2 emissions. It also allows like-for-like model comparisons.

Zenith claims a conversion rate of 7.5% over the contract term among eligible employees, which it expects will rise as the economy continues to pick up towards a possible 10-11%.

“It’s a case of educating employees that their current used car costs them £x per month on the loan, SMR, insurance, etc. versus a lower price per month for a salary sacrifice car which includes SMR and insurance,” said Buchan.

“There are probably eight million UK employees that would be eligible for salary sacrifice and they fall into two groups: one that is focused on affordably – they want the lowest price - and one that is focused on service – they are higher income earners but don’t want the hassle of sorting our SMR and insurance.”

Buchan believes that, perhaps only five years in to the future, the next generation of car buyers will be attuned to purchasing everything on a monthly lease.

“They won’t own their assets so fixed cost motoring will be highly attractive,” says Buchan. “And they will be more focused on mobility than brand.”