Common myths about salary sacrifice cars (debunked)

Salary sacrifice car schemes have become an increasingly popular employee benefit, particularly as more businesses embrace electric vehicles. However, despite their growing popularity, there are still plenty of misconceptions about how salary sacrifice schemes work.

If you’re considering introducing a salary sacrifice scheme, here’s the fact vs the fiction…

Myth 1: Salary sacrifice is only for large companies

One of the biggest myths is that salary sacrifice schemes are only suitable for large organisations with hundreds of employees.

In reality, businesses of all sizes can offer salary sacrifice cars. Whether you employ 20 people or 2,000, a well-managed car scheme can help attract and retain talent while supporting sustainability goals.

Myth 2: Employees end up paying more

Many people assume that giving up part of their salary means they’re paying more overall. In fact, salary sacrifice can often be a cost-effective way to access a brand new vehicle. Monthly payments typically include maintenance, servicing, breakdown cover, insurance and road tax, making budgeting much simpler. For electric vehicles in particular, the low Benefit in Kind (BiK) tax rates can make salary sacrifice especially attractive.

Of course, the exact savings depend on an individual’s salary, tax position, and the vehicle they choose.

Myth 3: Salary sacrifice is only for electric cars

While electric vehicles are by far the most popular choice due to favourable tax treatment, salary sacrifice schemes aren’t exclusively limited to EVs.

However, because petrol and diesel vehicles attract significantly higher Benefit in Kind tax, electric cars usually provide the greatest financial advantage for both employers and employees.

Myth 4: Salary sacrifice car schemes are complicated to manage

Introducing a salary sacrifice scheme might sound like an administrative burden, but it doesn’t have to be. With the support of an experienced fleet management company, much of the administration can be handled on your behalf. From sourcing vehicles and managing suppliers, to supporting employees throughout the process, fleet management companies make implementation of salary sacrifice car schemes straightforward.

Myth 5: Employees are locked into a bad deal

Another common misconception about salary sacrifice car schemes is that employees have no flexibility if their circumstances change. Many schemes include protection for certain lifestyle events, such as redundancy, long-term sickness, or maternity leave. While terms vary depending on the provider, these safeguards can help reduce financial risk for both employers and employees.

Myth 6: It’s only about the car

A salary sacrifice scheme offers more than access to a new vehicle. For employers, it can strengthen recruitment and retention, demonstrate a commitment to employee wellbeing, and support environmental objectives by encouraging the uptake of lower-emission vehicles. For employees, salary sacrifice car schemes provide a convenient way to drive a new car with many running costs bundled into a single monthly deduction.

Making salary sacrifice work for your business

Salary sacrifice isn’t a one-size-fits-all solution, but many of the concerns surrounding it are based on outdated information or common misunderstandings.

With expert guidance and the right support, businesses can introduce a scheme that benefits both the organisation and its employees. Fleet Operations helps employers navigate every stage of the process, making it easier to implement a salary sacrifice car scheme that is simple to manage, financially efficient, and tailored to the needs of your workforce.

At Fleet Operations, we offer an innovative salary sacrifice scheme- SalAd– that offers the most competitive prices available, so everybody saves. With our innovative multi-bid approach for salary sacrifice cars, we ensure your employees get the lowest monthly price in the market, every time. Combined with our comprehensive lifestyle protection, both you and your employees are covered for the unexpected.