Fleet News

Strong future for salary sacrifice after tax changes

Following the Benefit in Kind tax changes in April earlier this year, interest in salary sacrifice from prospective drivers and employers remains strong, reports Zenith.

In April 2013 the Benefit in Kind tax bands shifted again, with a one percentage point increase for cars emitting 95g/km CO2 and above.

As of May 2013, average emissions for cars ordered through Zenith’s salary sacrifice car schemes have now fallen to 106g/km but are dropping at a slower rate than in 2012. 

Zenith says that 46% of vehicles ordered since April have CO2 emissions of less than 100g/km, whilst 44% of vehicles ordered have emissions between 100-119g/km and the remaining 10% are 120g/km or higher.

Diesel is still by far the most popular option for sub 100g/km cars, providing the biggest choice of models available below this emission band and with prices starting lower than for hybrids. 

Out of Zenith’s salary sacrifice cars currently on order, 68.5% are diesels and 2.5% are alternative fuel.  Petrol vehicles continue to grow in popularity with a seven percentage point increase in proportion of orders since the start of the year, to 29%. 

Petrol cars with emissions of 99g/km such as the Ford Fiesta, Kia Picanto and Peugeot 208 are driving this increase.

Ian Hughes, Zenith’s commercial director, said:  “It is interesting to see that although sub-100g/km cars are the most popular, and there are many to choose from in that category, a significant number of drivers are still selecting vehicles above that threshold. 

“They are still able to save money on the slightly higher emitting cars while also benefitting from the all-inclusive package, fixed costs, a hassle free service and potentially lower fuel costs than in their previous car. 

“As we expected, petrol cars are increasing in popularity and taking market share from diesel models.”

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