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5 car companies with subscription services in 2023

• Which car companies offer subscriptions?
  • Elmo
  • Wagonex
  • Onto
  • Flexed
  • MyCarDirect
• Should I get a car on subscription?

Why do you need to know the top 5 car companies with subscription services?

Cars are a big part of our lives. We use them to commute to work, take the kids to school, and run errands. With all the time we spend in our cars, it’s no wonder that we want them to be comfortable and stylish.  

There are five car companies with subscription services that allow you to have access to a variety of cars without the hassle of owning or leasing one. 

This is ideal for people who want the flexibility to drive a different car depending on their changing needs. Plus, you don’t have to worry about maintenance or repairs.  

So, read on for 5 car companies with subscription services. 

Which car companies offer subscriptions? 

If you’re looking for a subscription service that will give you access to a variety of cars, then one of these seven companies is sure to have what you’re looking for. 

1. Elmo

Elmo is an electric car subscription company that operates in the UK. Elmo offers a flexible and all-inclusive car subscription service, which allows customers to drive a car for a monthly fee.  

What sets them apart from other electric car subscription companies, such as Onto? 

Elmo offers more miles per month as standard, and you can extend to up to 1,800 miles per month. Although you can add more miles per month with Onto’s subscription, it doesn’t clarify by up to how much.  

So, if you are potentially travelling long journeys often – it could be worth considering Elmo. 

Here are some key features of Elmo’s car subscription service: 

• Drivers must be aged 25 years or over 
• Elmo’s monthly payment includes the cost of the car, insurance, road tax and maintenance so customers don’t have to worry about additional expenses. 
• Basic mileage allowance starts from 800 miles per month as standard, drivers can extend their mileage by up to 1,800 miles per month 
• Customers can return or swap a car with 30 days notice 
• Elmo specialises in electric vehicles, so if you’re looking to trial going electric before making the big switch, Elmo is a great company to choose 
• Elmo offers two options: 
• elmoFlex offers a 60-day minimum term, ideal for those who need flexibility more than anything, they can swap a vehicle or stop the subscription with 30 days notice 
• elmoSave offers a 12-month minimum term, this is perfect for those looking to save a bit more money but still want the convenience of the all-inclusive package in a fixed monthly cost 

Could Elmo be the car subscription company that’s ideal for you? If you are looking to trial an electric car, or maybe even a few of them, and need a short term or longer term fix – then Elmo could be the one for you. 

2. Wagonex

Founded in 2016, Wagonex is known to be one of the first car subscription providers to be set up. The brand’s idea to set up a car subscription service was so that drivers could have “the ability to have an SUV for winter and convertible for the summer”. 

Here’s what you should know about Wagonex’s car subscription service: 

• Must be aged 25 years or over to apply 
• Wagonex ‘s monthly payment includes the cost of the car, delivery of the vehicle, road tax, maintenance and servicing so some of the expenses are included in the monthly cost 
• Drivers can also add Wagonex insurance to their monthly cost 
• A wide range of vehicles are available on subscription from SUVs, hatchbacks, luxury vehicles, city cars and more 
• The minimum subscription length is one month, drivers then have the option to extend  
• Basic mileage allowance starts from 800 miles per month as standard, drivers can extend their mileage by up to 1,800 miles per month 
• Customers can return or swap a car with 30 days notice 

Is Wagonex one of the car companies with a subscription service that’s perfect for your needs? If you are 25 or over and are looking to regularly switch your vehicle whether that be electric, SUV, or convertible then Wagonex is worth considering. 

3. Onto

Onto is the ideal subscription service for those looking to trial electric cars. They have specialised in electric vehicles since the company was founded in 2018.  

What sets them apart from Elmo? 

Onto offers charging in its all-inclusive monthly bundle of up to 750 miles, which equates to £120 per month. Onto also offers access to 20,000+ UK public charging points. 

So if you’re looking to experience electric without the hassle of sorting extras such as charging and charging cards, Onto could be the car subscripton company for you. 

Here is what’s up for grabs with Onto: 

• Those looking for something short-term won’t be disappointed. Onto’s subscription service doesn’t require a long-term commitment, and customers can return the electric car with just 30 days’ notice. 
• Onto’s monthly payment offers an all-inclusive bundle which includes the cost of the car, insurance, maintenance, and charging, so customers don’t have to worry about surprise costs. 
• Initial costs include £49.50 for delivery and collection of the vehicle, and just £9.99 to sign up. After this there is no deposit or admin fees to worry about. 
• Over 25? Great news for you, as insurance is included for drivers over 25. 
• Onto’s fleet consists entirely of electric vehicles, including popular models like the Tesla Model 3, Nissan Leaf, and Renault Zoe. 
• Onto drivers have access to a range of UK public charging points including BP Pulse, Shell and Tesla superchargers. This is included in the monthly cost. 
• The Onto subscription is managed via their app on your phone. Through the app you can view and change car reservations, payments and maintenance requests. 
• Mileage starts from 750 miles per month. Customers can add more miles as a “bolt-on”. 

Is Onto the car subscription company that’s ideal for you? Before the 2035 ban on the sale of new internal combustion engine (ICE) cars, it could be worth trialling electric before you inevitably have to make the switch.  

Onto specialises in EVs, which is ideal if you’re looking to test the waters beforehand. With Onto’s access to a wide range of charging points, and easy access to the Onto app, it provides a service with ease that perhaps others do not. 

4. Flexed

Flexed is a UK-based car subscription service that provides flexible and affordable car leasing options to customers.  

Here are some key features of Flexed’s car subscription service: 

• Drivers must be aged between 25 to 75 years 
• Offers a 28-day or a month-by-month service – perfect for short term and if you want to trial a particular model for a month or two or even up to a year 
• Easy budgeting thanks to Flexed’s all-inclusive monthly pricing including insurance, maintenance, breakdown cover, warranty, road tax, and the cost of the car 
• If you change your mind, you can return the car or switch to a different model within 28 days with no cancellation fees 
• Mileage can go up to 15,000 miles per year on a pro-rata basis as standard 
• No upfront deposit  
• Flexed provides a wide choice of vehicles on the market, ranging from SUVs, small city cars, luxury models and more 
• According to their website they have the following brands available for subscription: 
  • Audi 
  • BMW 
  • Fiat 
  • KIA 
  • Mercedes-Benz 
  • MINI 
  • Range Rover 
  • Renault 
  • Volkswagen 
  • Volvo 
• Drivers can order from the Flexed website and be driving their car within a couple of days, models can be delivered across the UK (with delivery charges) 

Could Flexed be one of the car companies with subscription services that suits your needs? If flexibilty, easy budgeting, no upfront deposit and quick delivery is something high on your priority list, then Flexed is likely to be the ideal car subscription company for you. 

5. MyCarDirect

MyCarDirect is a UK-based car subscription service that provides flexible and affordable car leasing options to customers. Here are some key features of MyCarDirect’s car subscription service: 

• Great for those in need of flexibility, as they offer subscriptions from as little as 1 month up to as long as 4 years – it’s worth noting that prices go down the longer you subscribe 
• Maintenance, MOT, road assistance, road tax with delivery and collection are all included in the monthly price 
• Insurance can be included as an extra option added to the monthly cost, organised via a third party 
• MyCarDirect also offers lots of choice for those who want to trial various car types, from SUVs, hatchbacks, city cars to premium models, MyCarDirect can cater to many different needs and requirements 
• Customers are charged a joining fee of £250 which gives you “life” membership 
• You must pay a deposit between £250 to £500 – however this is fully refundable 
• Cars can be delivered across the UK – free of charge! 
• Mileage is very generous starting from 1,000 miles per month as standard, and goes up to 2,000 miles per month 

Is MyCarDirect one of the car companies with subscription services that’s ideal for you? If you’re unsure whether you need a car for a month or maybe years, and you think you are likely to switch between cars or need the convenience of a subscription for a few years – then MyCarDirect is definitely worthwhile. 

Although there is a higher upfront cost than others, starting from £500 – which includes the £250 joining fee and a minimum deposit of £250 – you should consider if the convenience, flexibility, high monthly mileage, free delivery and collection are worth it for you or not. 

Should I get a car on subscription? 

As the world of transportation rapidly changes, so too do the companies that provide vehicles.  

To keep up with the competition and consumer demand, many car companies are offering subscription services that allow customers to have more flexibility and choice.  

Whether you’re looking for an all-inclusive package or a pay-as-you-go model, there’s sure to be a car subscription service that’s right for you. With so many options on the market, it’s never been easier to get behind the wheel of your dream car. 

Disadvantages of car subscriptions

• What are the disadvantages of car subscriptions? 
• What should you consider with car subscriptions? 
• Should I get a car subscription? 

Car subscriptions: it’s the new concept taking over the motor industry. It promises great flexibility, ease and an opportunity for fanatics to take many new models for a spin. Perhaps you know all about the benefits already, but what about the disadvantages of car subscriptions?

Read on for everything you must know… 

What are the disadvantages of car subscriptions? 

Whilst you may know the many advantages with car subscriptions including flexibility, ease and convenience, there are some exceptions and disadvantages of car subscriptions to consider.  

Disadvantages of car subscriptions: 

Cost

Car subscriptions can work out more costly compared to buying or leasing a car, especially if you subscribe for a long period of time.

All-inclusive subscription plans with insurance, maintenance and other extras can boost up the monthly fee making it more expensive than monthly leasing fees. 

Electric Vehicles

Those looking to trial an electric car should be aware of how they are going to charge their EV. Whilst drivers can use public charge points, this isn’t ideal for day-to-day ease and convenience.

The best option is to install a home charger but: 

• People living in flats and shared accommodation won’t be able to do this 
• This isn’t a great idea for those looking to trial and test an EV to see how it fits their lifestyle, if they later realise, they do not want an EV 

Restrictions on use 

Usually, you must be at least over 25 to 30 years of age to apply for a car subscription service. Additionally, there are mileage restrictions you must agree to when signing up.

This can be an issue if you usually drive long distances, you will be faced with extra fees if you exceed the agreed mileage. 

Lack of ownership 

You are putting money towards something you will never own. For some, the flexibility and convenience outweigh the downside of no ownership.

For others, they prefer their money to go towards something they will eventually own. 

Additional fees 

Although there is an all-inclusive subscription which includes general maintenance, breakdown cover and service, other services like cleaning, delivery or collection aren’t usually covered in the monthly cost.

Using these services often will rack up the costs and make the overall car subscription service more expensive than anticipated. 

So, now we’ve covered the disadvantages of car subscriptions, it’s important to question and understand whether the pros outweigh the cons for you and your individual needs.  

What should you consider with car subscriptions? 

Car subscriptions can be a convenient and flexible way to access a vehicle, but there are several things to consider before signing up for a service. Here are some factors to keep in mind: 

Cost

As mentioned previously, car subscriptions can work out more expensive than buying or leasing a car – this is dependent on how you use the service.

Ensure you compare your daily journeys with other vehicle finance options or other transportation options such as public transport. 

Service Area

Usually, if you live within a certain radius of the car subscription provider, delivery of the vehicle can be free. However, if you live considerably far away, this can cost around £1 per mile for delivery of the vehicle. 

Insurance

How you buy insurance on a car subscription varies between the service providers. Some ask you to buy their own insurance, this can work out more expensive than the ‘traditional’ car insurance.

Check this with your provider before going ahead, so that you have a good idea whether this aligns with your budget. 

Contractual Obligations

It’s a good idea to thoroughly read through the contract before signing any final papers. Understand your obligations and responsibilities and be aware of any fees linked with cancelling or changing your subscription.

It’s important to ask any questions before you sign the papers. A good car subscription provider will be more than happy to answer your questions, if they don’t then take this as a sign to look elsewhere. 

Customer Service

Another way to sense check a provider before using them, search for reviews and ratings of the company online. Seeing how they respond and engage with their customers will highlight whether they are a provider you can trust, or if they are one to avoid. 

By considering these factors, you can make an informed decision about whether a car subscription service is right for you. 

Should I get a car subscription?

By now you’re probably wondering “Should I get a car subscription?” The answer to this isn’t a simple yes or no. 

It completely depends on what you as an individual are looking for and your day-to-day requirements you’ll need from a car.  

If the disadvantages of car subscriptions don’t turn you off including restrictions on mileage, lack of ownership, potential extra fees, limited choice of vehicles and potential high costs – then it could be worth considering getting a car subscription. 

Those who will find car subscriptions worth it, will most likely need the convenience, ease and flexibility that other car finance or leases simply do not offer. 

Are car subscriptions worth it in 2023?

• Is car subscription better than buying?  
• Is car subscription cheaper than buying? 
• Are car subscriptions worth it?  

Are car subscriptions worth it?  

With the slowly increasing trend of car subscriptions, it’s the question more and more drivers are starting to ask.  

If you’re looking to compare getting a car subscription to buying the car and want to know are car subscriptions worth it – then keep on reading for everything you need to know. 

Is a car subscription better than buying?  

So, is a car subscription better than buying? 

It depends. 

If your needs call for flexibility, convenience, lower upfront costs and no depreciation concerns – then yes, a car subscription could be better than buying for you and your needs. 

It should be noted that there are some potential drawbacks to be aware of such as: 

• Mileage restrictions 
• Potential cancellation fees 
• Possibility of paying more in the long run compared to buying, leasing or financing 

It’s important to remember that these vary between car subscription service providers. 

If, however, you prefer to have total control and ownership of a vehicle, a car subscription would not be worth it for you. 

Before signing up for a car subscription consider the following: 

• How long you’ll need the car 
• Your budget 
• The specific terms and conditions of different service providers 

Once you have an understanding of these factors, it should point you in the right direction of whether to get a car on a subscription or to consider other financing options such as buying or leasing. 

Let’s touch on some of the ways you’ll benefit from using a car subscription: 

• Flexibility: Compared to buying a car, subscriptions offer much more flexibility. You can pick how long you subscribe to a car for, and you can change between different brands or models. This is perfect for those needing a short-term ‘rental’ or wanting to try out different models before they buy. 
• Convenience: Most subscriptions have the option to include insurance, maintenance, servicing, roadside assistance, and other optional extras as an all-inclusive package into your monthly cost. This makes your life a lot easier, and you can drive without having to worry about any surprise expenses coming your way. 
• Lower upfront costs: Typically, with a car subscription, you pay a monthly fee that covers things like insurance, maintenance, and general repairs. When comparing this to buying a car, a subscription is a lot more affordable. Car buyers must pay a large upfront payment, whilst dealing with other ongoing costs they must sort out themselves including insurance, repairs, and maintenance. 
• No depreciation: Car buyers bear the risk of their car losing value over time. As you are only subscribing to a vehicle, you don’t need to worry about how the car depreciates as this does not affect you!  

How about some of the things you might need to consider before subscribing to a car? 

• Higher long-term costs: Although car subscriptions can be more convenient and there are no or very low upfront costs, they can work out more expensive in the long term than buying a car. 
• Limited ownership: As you do not own the car you cannot make any modifications to it, and this will not build any personal equity. On top of this, there are usually mileage limitations, which can be an issue if you use the car often. 
• Poor credit: Although most providers don’t perform a hard search on your credit history, they may do a soft search. If your credit is poor, you could be rejected. However, car subscription service providers will be much less stringent than if you applied for other finance options such as a Personal Contract Purchase or Hire Purchase. 

If the benefits of having endless flexibility, lower upfront costs and no worries for depreciation of the vehicle you’re driving sound like something that’s up your street, then a car subscription would be worth it for you. 

If, however, the downsides don’t outweigh the benefits, including high long-term costs, limited ownership and uncertainty of future prices, then it may be worth considering other car financing options. 

Is car subscription cheaper than buying? 

Yes and no. The real answer is that it really does depend on how you do it. 

The rule of thumb is a short-term car subscription will work out much cheaper than buying a car. 

How about we give an example? 

Let’s say I buy a brand-new Ford Fiesta for £25,000. In 5 months’, the value of the Fiesta has depreciated, and the Fiesta is now worth £18,000. So that’s £7,000 I’m losing within 5 months. 

If I were to get this on a subscription, I could pay around £500 a month for the Fiesta. Fast forward 5 months, I will have paid just £2,500 to drive the Fiesta. 

However, if you subscribe to a particular car for over 4 years, then this is likely to work out as more expensive than if you bought the vehicle – but this does depend on the model. 

Here are several factors that affect whether a subscription is cheaper than buying: 

• Length of the subscription 
• The type of car 
• Mileage allowance 
• If you have an all-inclusive subscription 
• The specific terms and conditions of the service provider 

For some people, if car subscriptions work out more expensive than buying, then it is usually because the benefits including flexibility, maintenance included and no re-sale concerns, outweigh the expense of the car subscription. 

Things such as ease, flexibility and it being a hassle-free alternative to vehicle ownership. On top of this you enjoy the benefits and freedom of having a car without the upfront costs of buying one.  

The all-inclusive car subscription covers most of the costs including maintenance, insurance, servicing, breakdown cover and more. While this can work out more expensive overall, if you subscribe to a particular car for a long period, the ease of having everything all in one monthly cost is an attractive benefit to many. 

So, to summarise and answer the question: Is car subscription cheaper than buying? If you are looking to get a car for a short period of time, this could be between 3 months to a full year, then a car subscription is likely to be the more cost-effective option for you over buying a car. 

If you know you will need a car for longer than two years or more, we suggest looking into other finance options such as leasing or purchasing your car. 

Are car subscriptions worth it? 

So, are car subscriptions worth it?  

If when searching for a car your priorities are ease and flexibility, convenience, lower upfront costs and you don’t want the worries of depreciation – then a car subscription is likely your perfect solution. 

Just remember the drawbacks involved with a subscription including mileage limitation, possible cancellation fees (dependent on the provider) and the possibility of paying more in the long run than you would have if you had purchased the car outright. 

If the benefits outweigh the cons, then a car subscription is worth it!  

We would recommend first establishing your needs, requirements and what you need from a car subscription, then compare different providers and consider which is the most suitable one for you. 

Ford BlueCruise: The Future of Driving Assistance?

• What is Ford BlueCruise 
• How does it work? 
• What are the benefits? 
• What are the limitations? 
• The future of Ford BlueCruise 
• Ford’s commitment to safety 

Imagine a world where driving and safety are a top priority, but with the help of robots?! Self-driving cars and autonomous technology are slowly being integrated into our everyday driving, and they’ve come a long way since it all began. One technology that has taken the world by storm is Ford BlueCruise.   

So, how does Ford BlueCruise work, what exactly is it, and could it be the future of driving assistance?  

What is Ford BlueCruise?  

Ford BlueCruise is an innovative hands-free driving technology that allows Ford Mustang Mach-e drivers to take their hands off the wheel on certain pre-mapped motorways, also known as “Blue Zones”.   

Ford Blue Zones cover over 95% of the UK’s motorways today.  

This cutting-edge technology makes driving safer and more convenient by taking care of steering, acceleration, and braking. 

Once we understood exactly what Ford BlueCruise was, we took to our YouTube following and asked the question:  

Let’s see how many said yes…  

Only 29% said they would use Ford’s hands-free driving assistance on motorways.   

That leaves 71% of sceptical motorists who would not use the BlueCruise.   

Are they right to be concerned? Or are all these eyebrows being raised for no reason at all? 

How does it work?  

Ford BlueCruise utilises a combination of advanced sensors and cameras to monitor the vehicle’s surroundings.   

The sensors and cameras work together to identify road markings, lane lines, and other vehicles, allowing the Mustang Mach-e to stay in its lane and maintain a safe distance from other cars.  

To ensure Mustang Mach-e drivers are paying attention to the road ahead, an infrared camera monitors the driver’s eye gaze and head position.   

If the driver isn’t paying attention and looking ahead, either an alert message is displayed on the dashboard, or an audible chime will be heard reminding the driver to return their eyes to the road.  

If the driver ignores the warnings, the Ford BlueCruise system will cancel and slowly reduce the speed of the Mustang Mach-e while maintaining steering control.   

What are the benefits?  

One of the main benefits of Ford BlueCruise is increased safety. By taking over the driving responsibilities, the system can help prevent accidents caused by distracted or fatigued drivers.   

Additionally, the system can react faster than a human driver in emergency situations, potentially avoiding accidents altogether.  

Another benefit of Ford BlueCruise is reduced driver fatigue. Long drives can be tiring, and constantly having to focus on the road can make it even more exhausting.   

With Ford’s hands-free technology, Ford Mustang Mach-e drivers can relax and let the system do the work, making long drives more comfortable and less taxing.  

What are the limitations?  

While Ford’s hands-free feature is an impressive technology, it does have some limitations.  

The system may not perform as well in certain weather conditions, such as heavy rain or snow.   

Additionally, certain road conditions, such as construction zones or narrow roads, may require the driver to take over control of the vehicle.  

Drivers should remember that when using Ford’s hands-free technology, they need to be alert and ready to take over if necessary.   

The system is designed to assist the driver, but it’s not a substitute for safe driving.  

The future of Ford BlueCruise  

So, what does the future of Ford and its new feature BlueCruise hold? As the brand’s technology continues to grow and develop, it’s likely we’ll see even more advanced driving systems in the years to come. 

In the case of Ford’s hands-free technology, there’s already talk of expanding the technology to more vehicles beyond the current Ford Mustang Mach-E.  

Additionally, there’s potential for advancements in the technology itself. For example, future iterations of Ford BlueCruise may be able to handle even more complex driving scenarios, such as navigating city streets or making turns at intersections.  

Ford’s commitment to safety  

At the end of the day, Ford’s primary goal with BlueCruise, the Mustang Mach-e and all their vehicles is to keep drivers and passengers safe.   

Ford’s commitment to safety is clear. With existing safety features including adaptive cruise control, lane departure warning, and automatic emergency braking – we can trust the brand is dedicated to developing driving assistance technology. 

Conclusion

Ford BlueCruise is a game-changer in automotive technology that has the potential to revolutionise the way we drive. Ford’s hands-free technology can increase safety, reduce driver fatigue, and improve convenience.   

While there are some limitations, it’s clear that Ford is committed to advancing the technology and improving the driving experience for everyone.  

If you’re considering purchasing a Ford vehicle with BlueCruise, it’s important to understand the technology and its limitations. Yes, the system is designed to assist the driver, however, it should not become a replacement for safe driving. The driver should always be prepared to take over control of the vehicle.  

However, for long motorway drives, Ford BlueCruise can be a valuable tool that can increase safety and reduce driver fatigue. The hands-free driving capability can also be a welcome convenience for many drivers.  

As Ford continues to refine and improve BlueCruise, we can expect even more impressive capabilities in the future.  

What are your thoughts on Ford BlueCruise? Would you try it out? 

Is car subscription a good idea?

• What is a car subscription? 
• What are the pros and cons of a car subscription? 
• Is car subscription a good idea? 

You may have heard about car subscriptions through Volvo, Renault or the renowned premium brand Jaguar, along with a number of independent companies entering the market. So, is car subscription a good idea? Should you consider getting one?  

Before we dissect the pros and cons of a car subscription, let’s first understand what it is.

What is a car subscription? 

A car subscription allows drivers fantastic flexibility and ease, with the option to switch between different vehicles every few months or more.  

They simply pay a monthly fee, sometimes this is an all-inclusive subscription including maintenance, insurance (sometimes optional), breakdown cover and servicing. Sometimes a charging card to use for public charge points can be included if it’s an electric car too.  

What are the pros and cons of a car subscription? 

What are the benefits of a car subscription? 

So, what are the pros of a subscription? And is a car subscription a good idea for you? 

Subscribing to cars is still a new concept to many in the motor trade.  

It’s grown in popularity due to the flexibility that customers can ‘rent’ cars monthly rather than committing to a long-term finance agreement.  

Some see it as a very long test drive for cars people are considering buying outright or going electric. 

Here are some of the benefits of a vehicle subscription: 

• Flexibility: It’s a great alternative to traditional leasing or buying outright. Drivers choose how long they keep the vehicle, have the option to swap cars and can pause their subscription if needed – without any long-term commitment. 
• No down payment: As you aren’t financing or owning the car, no down payment is required upfront.  
• Convenience: You can shop from the comfort of your sofa. Providers usually offer home delivery or pick-up services, meaning you spend less time travelling yourself! 
• Variety: What may be the most obvious plus is you get to try out a variety of different cars in a short space of time.  
• No need for a car loan: As drivers won’t own the vehicle, they don’t need to take out a loan to finance the purchase of the car, so their credit score will not be impacted 
• No depreciation worries: Again, as motorists won’t own the car, they don’t have to worry about it depreciating as it is not their responsibility. 
• All-inclusive subscription: Many UK providers offer the option to include in your monthly cost maintenance, insurance, breakdown cover and servicing. This means easy budgeting, and no surprise costs or repairs! 
• Electric vehicles: If you’re thinking about switching to an electric vehicle, but you’re uncertain it will fit your lifestyle, then getting an EV subscription is a fantastic way to test the waters before doing the deep dive. 

How do these benefits sound to you? If you are someone who prioritises convenience, variety, easy budgeting and a non-committal car subscription sounds like the perfect vehicle solution for you – then a car subscription could be a good idea. 

What are the disadvantages of a car subscription? 

Now we’ve covered how you can benefit from a car subscription, what about the things you should be aware of?  

Here are some disadvantages of car subscriptions: 

• Electric vehicles: If you do opt for an EV subscription you will need to account for charging it at public charging stations. The best option would be to install a home charger but: 
  • 1) This may not be accessible for people living in flats and shared accommodation 
  • 2)This won’t be ideal for drivers who only want an EV to ‘trial’ and test to see if it suits their lifestyle 

• Cost: Sometimes a subscription can work out more expensive than traditional car ownership, leasing or a Personal Contract Purchase. This gets more expensive if you don’t drive a lot too. 
• Restrictions on use: Usually there are restrictions on a vehicle subscription such as mileage, which can be an issue if you need to drive long distances. Plus, you must be over 25-30 years old to apply depending on the service. 
• Lack of ownership: You are paying for something that you will never own. Whilst for some this is not a problem; others may prefer their money go towards something they own.  
• Additional fees: Although you can opt for an all-inclusive subscription which includes overall maintenance and breakdown cover, things such as cleaning, delivery or collection are not usually covered. These fees may add up quickly, making the service more expensive than anticipated. 
• Limited choice of vehicles: You may not have as many vehicle options as on a car subscription to the traditional dealership – but this does vary between providers.  

If after reading this, you are wondering “Is car subscription a good idea?” – we recommend considering if the downsides outweigh the advantages of a car subscription. If they do, then yes, it could be your perfect vehicle solution. 

Is car subscription a good idea? 

So, is a car subscription a good idea? This completely depends on your individual circumstances and needs. 

If flexibility and convenience are at the top of your priority list when getting a vehicle, a subscription is a fantastic option for you. 

Also for car fanatics, subscriptions offer a great way to try many different types of vehicles before you potentially buy one outright.  

Although car subscriptions (in the long run) can sometimes work out more expensive than a traditional lease or car ownership it’s great if you are looking to avoid paying upfront costs. 

So, once you have weighed up all the pros and cons of car subscriptions, and you understand your driving needs, habits and budget, and have answered the big question: “Is car subscription a good idea?”, then you will be one step closer to understanding the best vehicle solution for you. 

What is a car subscription UK?

• What is a car subscription? 
• How a car subscription works
• What are the benefits of a car subscription?  
• Is car subscription tax deductible?
• Does a car subscription show on credit reports?
• Should you consider a car subscription? 

The car subscription: it’s been taking the UK automotive industry by storm in recent years. 

From Amazon Prime to streaming services like Netflix, and even food shopping like Gousto, there seems to be a subscription for every service under the British sun. If only we could subscribe to sunny weather… 

Imagine the traditional responsibilities that come with a Personal Contract Purchase or Personal Contract Hire, but with less responsibility and much more flexibility and ease.  

What do we mean by this? 

Read on for everything you need to know about car subscriptions in the UK… 

What is a car subscription in the UK? 

So, what exactly is a car subscription in the UK?  

A car subscription in the UK is the new alternative to owning or leasing a new car. You are essentially borrowing a car of your choosing for a certain period of time, usually from a minimum of a month to up to 2 years.  

This is a fantastic option for those who are testing the waters before buying their dream car, or their driving needs change throughout the year. 

How a car subscription works  

Drivers pay a monthly fee and receive a car of their choosing (subject to availability). This fee can be increased to include even more flexibility and convenience including maintenance, insurance, breakdown cover and servicing.  

With the way the world is going after COVID, the war in Ukraine, and the rising cost of living, it’s no wonder more and more people are seeking cost-effective ways to drive vehicles.  

Car subscriptions have sky-rocketed in popularity due to being an affordable and non-committed way of driving a car without the hassle of a long-term lease or ownership. 

So, how exactly does a car subscription work in the UK? 

1. Choose a subscription service: consider your needs and budget, and what you need from a car subscription service provider. 

2. Select a car: Here we recommend you establish what exactly you need from a car at this moment in time. Read our article on How to choose your next car for an in-depth guide on selecting your ideal car. 

3. Sign up and pay: Once you’ve selected your car you can now sign up for a car subscription, here you can choose whether to opt into a ‘normal’ subscription or an all-inclusive car subscription to add insurance, maintenance and other care expenses to your monthly cost. 

4. Receive the car: After you’ve signed up for a car subscription and selected your car, the vehicle will be delivered to you or you can pick it up from a designated location.  

5. Use the car: How long you can use the car ranges usually from as short as one month to a minimum of 3 months dependent on the provider. Once you are done with the vehicle you will either return it and swap it for a new one or pause your subscription. This means you can subscribe to the same car for longer than the minimum number of months – subject to availability and the provider’s terms and conditions. 

What are the benefits of a car subscription? 

The main benefits of a car subscription in the UK are: 

• Ease & flexibility: You aren’t tied down to the traditional long-term financial commitment. You can also pause a subscription, and swap over cars with short notice. Perfect if you don’t need a car for a month here or there. 
• Try before you buy: Many people see car subscriptions as long-term test drives before they make the permanent decision of buying their dream car. 
• No negotiations: as you are usually researching and signing up for the car subscription online, you avoid the pressure of the salesman in a traditional dealership.  
• All-inclusive costs: There are options to have everything all in one fixed monthly payment including insurance, maintenance, breakdown cover, servicing and charging credit if you’re using an electric car. 
• Change cars regularly: If you are a car fanatic and like to try the latest models on the road, then a car subscription is perfect for you.  
• Experience electric: drivers looking to switch to an electric car are faced with big commitments such as buying and installing a home charger. Often it’s hard to imagine how an EV really suits your lifestyle without trying it. This is where an electric car subscription comes in to save the day. If it doesn’t work out, at least you’ve only paid for 1 or 2 months’ worth of fees. 

Is car subscription tax deductible?  

Looking to save some extra money on the side whilst also getting a car on subscription?  

Now, you can save tax on a car subscription – but this is dependent on the purpose of the car’s use. 

If the car is solely used for business purposes, the subscription fees can be tax deductible as a business expense. 

If your company has provided you with a car on subscription, you can claim back some or all of the VAT on the business car subscription.  

If you have got a car on subscription and it is being used for personal journeys, then this cannot be tax deducted. 

It is important to note that the tax deductibility of a car subscription in the UK is subject to the rules and regulations of HM Revenue & Customs (HMRC), and the specific terms and conditions of the subscription agreement.  

We recommend seeking advice from a qualified accountant or tax professional for guidance on the tax implications of a car subscription. 

Does a car subscription show on credit reports? 

Are you concerned about signing up for a car subscription and it showing up on your credit report? Or have you got a poor credit score? 

There’s no need to worry about this. Although car subscription companies do assess your credit history, this is usually a ‘soft’ credit check which doesn’t affect your score or mark your credit report. 

Some providers may carry out a ‘hard’ credit check if you apply for an all-inclusive car subscription. This will leave a mark on your credit report and can affect your score. However, if you are concerned about this we would advise selecting a provider that doesn’t do hard checks, or reducing how many providers you apply for in a short space of time. 

What is an all-inclusive car subscription? 

All-inclusive usually means you get a car with insurance, tax, maintenance and other benefits all included in one fixed monthly price.  

What about the car subscription showing on my credit report? 

Once you have signed up to a car subscription, this will not show up on your credit history. This is how they differ from PCP or Hire Purchase finance agreements, which always show up on your credit report. 

Remember, as car subscriptions won’t show on your credit history, this means they won’t have any positive effect on your credit score. Looking to understand the whole picture? Read our article on the disadvantages of car subscriptions.

Should you consider a car subscription? 

So, should you consider a car subscription in the UK? This completely depends on your individual needs and requirements. 

In the UK, car subscriptions are a fantastic alternative to traditional car leasing and ownership. It’s a great advantage to those who need day-to-day convenience and flexibility without being tied down to concerns including depreciation, maintenance and insurance. 

Remember, car subscriptions can be more expensive than other contracts such as car leasing and buying outright in the UK – but this does vary between providers. Your mileage is likely to be constricted to a certain number of miles per month or for however long you keep the vehicle. 

To get the best experience possible when choosing your UK car subscription provider, we recommend establishing what exactly you need from a car and your monthly budget.  

It’s absolutely vital you understand your driving needs and requirements before you sign up for a car subscription. For specialist vehicle advice on finding the right car finance agreement, chat with a Vehicle Specialist today. 

Best salary sacrifice company for EVs: top 5

• Why should I use a salary sacrifice company? 
• What should you consider when using some salary sacrifice companies? 
• Should I use a salary sacrifice company?  

Looking to source new electric vehicles for your employees on a salary sacrifice scheme? Need to know the best salary sacrifice company that’s most suited to your business? You are in the right place. 

Salary sacrifice car schemes have proven to provide a bundle of benefits for employers and employees alike, including – improved employee retention, engagement and loyalty and great money-saving benefits for everyone. Win-win! 2

What are the best 5 EV salary sacrifice companies in the UK? 

1. OSV – Founded in 1997 OSV provides over 100 years of combined experience in the motor industry, vehicle leasing, financing and purchasing. So, you’re in the hands of experts who really know their stuff. Enjoy access to the whole electric vehicle market with no deposit, an EV charger and installation and an EV care package (including insurance, breakdown cover, servicing, tyre repairs and maintenance). 

2. WeVee – Established in 2017 with the goal to accelerate moving forward into a more sustainable automotive future, the company offers a selection of 8 EVs via salary sacrifice along with a personalised presentation of how their salary sacrifice scheme benefits your company specifically. WeVee hopes to make EVs more accessible for all UK motorists.  

3. Ogilvie Fleet – An award-winning business contract hire & leasing company which has been going since 1993, Ogilvie Fleet provides a range of EVs, with an insurance and maintenance package included, and the option to add a home charger in the monthly payments. The company aims to assist businesses across the UK to reach their green goals and reduce the environmental impact of their fleet vehicles. 

4. The Electric Car Scheme – Founded in 2018, the company specialises in electric vehicles and offers a selection of 65 EVs with no deposit upfront, protection of early termination should the employee leave and the option to add an EV home charger with installation. The Electric Car Scheme is committed to helping individuals and businesses move towards a greener future in vehicles. 

5. Octopus EV – What started as an electric energy provider evolved into a UK-based renewable energy and EV specialist company founded in 2018. Customers have a selection of electric vehicles to choose from with insurance, maintenance included and an EV home charger. Employees have the option to purchase the vehicle at the end should they wish to. 

When selecting your salary sacrifice company, it’s important to first understand your individual needs and requirements as a business, but also which company is going to provide the support your employees need.  

After all, they are the ones who will be most impacted by the company you decide to use. 

So, we would advise also thoroughly considering the needs of your staff when choosing the best EV salary sacrifice company for you.  

Why should I use a salary sacrifice company? 

So, why should anyone use a salary sacrifice company? Well, this depends on the person and their individual needs. 

Often, employers set up this car scheme to provide an attractive employee benefit for existing staff and recruit new talent. 

EV salary sacrifice has proven time and time again to bring fantastic benefits to businesses such as improving employee retention, loyalty and engagement, whilst also attracting the best talent in a competitive recruitment market. 

In addition to this, working with an EV salary sacrifice company can offer other benefits including:  

• Tax savings: employees can save up to 40% on a car salary sacrifice scheme, and enjoy exemptions from congestion charges and low Benefit-In-Kind rates on EVs. Employers save on paying less National Insurance contributions for each employee on the scheme. 
• Competitive rates: EV salary sacrifice companies usually offer competitive rates on new cars, which means they can find you the most affordable vehicle fleet solution. 
• Maintenance & insurance included: some EV salary sacrifice companies provide an optional all-in-one EV package including maintenance, insurance, servicing, tyre repairs and a home charger with installation. 
• A new car every few years: Most EV salary sacrifice companies will offer the option to upgrade a vehicle once the contract has finished. This means a chance to enjoy the latest technology and features – with no worries about the car depreciating! 

Do these benefits sound worthwhile to your staff and business? Who would say no to saving tax, access to competitive rates on new EVs and the chance to put a smile on your employee’s face?  

Whilst car salary sacrifice companies do offer some very attractive benefits, there are some downsides to consider.  

What should you consider with using some salary sacrifice companies? 

What about some of the things you should consider when using a salary sacrifice company? Are there any downsides to look out for? 

Yes, of course with everything in life, there are some disadvantages to be aware of. The question you should ask is, are these disadvantages worth it for your company? 

Here are a few things to consider with a salary sacrifice company: 

• Early termination fees: if an employee decides to leave the company or salary sacrifice car scheme mid-way, the payments fall onto the employer to cover. OSV offers a solution to this with Early Termination Insurance, get in touch today for more information. 
• Pension & mortgage: taking part in a car salary sacrifice scheme could affect an employee’s pension and application for a mortgage. 
• Responsibility for upkeep: While some car salary sacrifice companies offer a maintenance and insurance package, others do not. 
• No ownership: Usually, car salary sacrifice companies do not provide the option to own the car outright. 

Now that we’ve covered the potential risks involved in working with an EV salary sacrifice company, do these downsides outweigh the benefits for your company personally? 

We recommend considering both sides of the coin before looking to set up a salary sacrifice scheme for your company. 

Should I use a salary sacrifice company? 

So, should your business use an EV salary sacrifice company?  

If the benefits including; paying less tax and National Insurance contributions; improving employee retention, loyalty and engagement; as well as saving money overall as a company, sounds worth it – then yes it is definitely worth considering contacting an EV salary sacrifice company. 

First, we would urge you to evaluate if the risks are worthwhile for your business and staff. 

 If you already have business goals in place to provide employee benefits and save money for your business, then it is well worth considering setting up a salary sacrifice scheme for your company. 

6 Best car salary sacrifice brokers UK

• Why should I use a salary sacrifice broker UK? 
• What are the advantages of using a UK salary sacrifice broker? 
• What are the disadvantages of using a UK salary sacrifice broker? 
• Should I use a UK salary sacrifice broker?

Are you an employer looking to set up an employee benefits scheme to provide them with electric cars? Interested in the top 6 best car salary sacrifice brokers in the UK? You’re in the right place… 

Here are the best 6 car salary sacrifice brokers in the UK: 

1. OSV – Provides over 100 years of combined experience in the motor industry. So, you’re in the hands of experts who really know their stuff. Enjoy access to the whole electric vehicle market with no deposit, an EV charger and installation and an EV care package (including insurance, breakdown cover, servicing, tyre repairs and maintenance). 

2. Tusker – As a carbon-neutral company Tusker offers a range of electric cars with no deposit and an inclusive package including insurance, breakdown cover and maintenance. 

3. Zenith – Provides a wide range of EV options, with additional benefits like maintenance, insurance, servicing, breakdown cover, replacement tyres, windscreen & glass cover and accident management. 

4. Fleet Evolution – Provides drivers with a cost-effective and flexible car leasing solution with no credit checks, and fleet vehicle solutions for employers 

5. Select Car Leasing – Offers salary sacrifice car schemes for both electric and non-electric cars with a variety of options. 

6. Loveelectric – Provides many electric vehicles available with no deposit, maintenance included, breakdown cover and the option to add a home charger 

Why should I use Salary Sacrifice broker UK? 

So, why should I use a UK car salary sacrifice broker? Is it worth it? More often than not, a UK salary sacrifice broker provides a more convenient and cost-effective way to get a brand-new electric car. 

What are the advantages of using a UK salary sacrifice broker?  

So, what are the advantages of using a UK salary sacrifice broker?  

• Cost-effective: electric car salary sacrifice offers low monthly payments, low Benefit-In-Kind (BIK) rates, exemption from congestion charges, and fantastic tax and National Insurance reductions 
• Competitive pricing: Unlike many car providers, brokers have access to multiple funders ensuring the most affordable car solution for you 
• No upfront costs: Many UK salary sacrifice brokers do not ask for an upfront deposit 
• Inclusive care package: Most schemes offer insurance, maintenance, and general servicing included in the monthly payment. Some can offer an optional home electric car charger with installation included 
• Access to a wider range of cars: the best UK salary sacrifice brokers will have access to all manufacturers and car dealers – giving you more freedom of choice. 

If saving money on tax and NI contributions, paying less BIK rates, easy monthly costs and an inclusive care package sounds like the car salary sacrifice solution that’s up your street – using a UK broker for your salary sacrifice scheme is likely to be ideal for you. 

What are the disadvantages of using a UK salary sacrifice broker? 

Whilst there are many benefits to using a UK salary sacrifice broker, there are some things to consider as well: 

• Tax implications: pension contributions, maternity pay and tax credits can all be affected whilst taking part in a salary sacrifice scheme 
• Limited mileage: there is an agreed amount of mileage you are allowed per year, exceeding this can result in fees 
• Early termination fees: if the employee leaves the contract the employer may be faced with early termination fees. This can be overcome with Early Termination Insurance offered by OSV  
• Credit rating: Car salary sacrifice schemes involve a credit check on the business looking to set it up for their employees. If the check fails, this will impact the company’s credit score. 

So, there are a few disadvantages to consider when looking at car salary sacrifice schemes. But there are also a number of benefits that outweigh the potential risks and limitations too.

We advise chatting with a Salary sacrifice specialist for advice on whether or not your company is suitable for setting up a scheme. 

Should I use a car salary sacrifice broker in the UK? 

So, should you use a UK broker for car salary sacrifice? When choosing your broker, it is vital you first understand your needs, circumstances and wants. Here are a few things to consider: 

• Budget: enjoy low fixed monthly payments – making budgeting easy! Remember to ensure taking part in car salary sacrifice doesn’t take you below the minimum wage threshold, and you can still live comfortably after the salary sacrifice deductions. 
• Employment status: Self-employed team members are not eligible to take part in the scheme. If you work for a PAYE company and the scheme is offered, it’s worth checking with your employer if you fit the requirements to participate. 
• Tax implications: Although there are tax, NI and BIK rate savings in car salary sacrifice, there are other areas that could be affected including pension contributions, maternity pay and tax credits. 
• Credit rating: Car salary sacrifice schemes involve a credit check for the company set it up, so it’s worth checking the business’ finances beforehand to ensure it doesn’t get declined – as this will affect the credit score. 

Looking for a cost-effective and convenient way to get a brand-new electric car? A salary sacrifice broker is the perfect solution for you.  

Remember to consider your individual needs and requirements when choosing your salary sacrifice car solution. Take advantage of Vehicle Specialist advice and ask as many questions as you need, it’s what they’re there for! 

Is salary sacrifice worth it for my company in 2023?

• What is salary sacrifice? 
• Is salary sacrifice a good idea for my business? 
• Will it save my company money?
• When would salary sacrifice not be worth it for your business? 
• Is salary sacrifice worth it for my company?

Have you been considering setting up a car salary sacrifice scheme for your company? Does the question “Is salary sacrifice worth it for my company?” pop up often in your mind?

Read on to explore everything you need to know about if salary sacrifice is worth it for your company, and if you should set one up today. 

What is salary sacrifice? 

A salary sacrifice scheme deducts a portion of an employee’s wage, and in return, the employer gives them a benefit. The most popular benefit is an electric car salary sacrifice scheme. 

Thanks to its reduced Benefit-In-Kind, income tax, National Insurance contributions, low maintenance and running costs, and a bundle of other benefits, salary sacrifice schemes for electric cars are a very attractive incentive for existing and new employees. 

Is salary sacrifice a good idea for my business? 

So, now you understand the basic principle of a salary sacrifice car scheme, is it something you should consider setting up for your business?  

Attract new talent 

Standing out from the crowd against other competing recruiters can be hard.  

A fantastic incentive to attract the best talent is by offering a car salary sacrifice scheme. 

Not only are you showing your care for your employees, but you’re offering an electric car that they perhaps otherwise could not afford. 

Vehicle fleet discounts 

A car salary sacrifice scheme allows your company access to vehicle fleet discounts, which means employees get new cars for much less! 

So, you will be offering an attractive incentive for new and existing employees – at a discount! 

Employee appreciation  

Setting up an electric car salary sacrifice scheme for employees can help them feel appreciated which promises great results for your company.  

How?  

The domino effect. 

Appreciating your employees could go a lot further than simply making them feel good. 

Appreciation has the power to, not only motivate employees including those around them but, in the long run, have an incredible knock-on effect on the growth of your business.  

Staff who feel valued and respected as people are much more likely to return the favour. 

Did you know that 43% of employees become demotivated due to feeling invisible or undervalued? 

Imagine 43% of your own employees feeling demotivated or unappreciated – how likely is that to spread to the rest of your employees, and affect your business long-term? 

So, is salary sacrifice worth it for your business?  

What you should be answering is: How much are your employees worth to you? 

Inexpensive company car tax  

Electric car salary sacrifice schemes return very little company car tax. The Benefit-In-Kind rate as of 2023/2024 is at just 2%.  

Although employees still have to pay tax, when comparing this tiny 2% to a whopping 37% BIK rate on diesel cars – it seems like a well-worth deal. 

Following on from appreciating employees, an employer who looks out for and ensures their staff are better off financially is much less likely to experience high employee turnover. 

Reduced Income Tax & National Insurance 

As you most likely already know, employers pay 13% of National Insurance (NI) contributions for each employee.  

In an EV salary sacrifice scheme, because the employee’s salary is reduced that also means reduced tax and NI contributions – for employees and employers. 

So, everyone can enjoy great money-saving benefits.  

Green credentials 

More and more businesses are taking steps towards reducing their carbon footprint and improving their green credentials. 

An electric car salary sacrifice scheme is the perfect way to achieve this goal. 

It works two-fold. 

1. Improve your company’s green credentials 

2. Employees feel good about reducing their CO² emissions on the roads 

In fact, studies have shown those who take an active step towards improving their environmental footprint have improved overall well-being and mental health. 

Just imagine the positive effect this could have on employees’ day-to-day mental well-being and work life.  

It’s very simple. Happy employees = thriving business. 

Employee loyalty  

If you want to reduce the risk of losing employees, the best thing you can do is nurture your existing staff. 

This is when an EV salary sacrifice scheme would be very much worth it for your company. 

The thought of losing an employee may vary from business to business. For those who say “I can just replace them”, you’re not wrong. But guess by how much? 

£30,000.  

To replace 3 employees, you’re looking at around £90,000. 

The domino effect. 

If one of your best employee leaves, who’s to say this won’t influence the rest of your best talent? 

By setting up a car salary sacrifice scheme, you will be nurturing your employees who have stuck with you and saving your business potentially hundreds of thousands of the big bucks. 

Will it save my company money?  

Setting up a car salary sacrifice can cost money to start with, but it doesn’t have to. 

Some salary sacrifice car scheme providers do charge to set up the scheme for you. Some charge a monthly fee whereas others charge a percentage of monthly rentals. 

What sets OSV apart? 

OSV does not charge you to set up a standard salary sacrifice car scheme. For a bespoke service, there is a fee – however many other providers do not provide this option at all. 

Let’s revisit the figures from earlier: the cost of losing an employee is around £30,000.  

To reduce the risk of losing £30,000 you must invest in your employees. 

If we look at car salary sacrifice as an investment in your new and existing employees, not only do you get to enjoy benefits such as reductions in NI employer contributions but you are also reducing the chance of losing £30,000 or possibly hundreds of thousands more. 

So, yes. An electric car salary sacrifice scheme can save your company money. 

When would salary sacrifice not be worth it for your business? 

Credit check 

To set up an electric car scheme your business will have to be credit checked. This is to ensure the company can demonstrate affordability.  

If your business is not in good shape financially, then a salary sacrifice would not be worth setting up.  

If the business is in good shape, however, then for the benefit of employees feeling valued and bettering retention among staff – then a salary sacrifice scheme is well worth it for your business

Employee wants to own the car  

Typically, all vehicles are on a Business Contract Hire and there is no option for an employee or the company to purchase a vehicle at the end of the agreement. 

As the employee is paying for the car through salary sacrifice, and enjoying all the benefits it has to offer – it has to be leased by the business, therefore it is a company car. 

To avoid any surprises and disappointments it’s best to educate your employees and establish the salary sacrifice car scheme guidelines and rules from the start. 

However, as part of the OSV Salary Sacrifice Scheme, we can discuss the best bespoke requirements where there could be the option to own. 

Employees are on lower income  

If the majority of your employees are on a lower income, and their taking part in a salary sacrifice scheme would take them below the minimum wage threshold – then setting up a scheme would not be suitable for your company. 

An employer cannot allow employees to take part in a scheme where it takes them below the minimum wage. Even if they could just about make it, you have a responsibility for duty of care for your staff to ensure they are financially comfortable.  

So, we would advise refraining from offering the scheme to employees that meet this threshold. 

What if the employee damages the car?  

If an employee damages the company car, then they are responsible for repairing it whilst in the contract. Some providers offer insurance to cover this. 

Employers should note that they are responsible for the condition of the vehicle when it is returned to the leasing company. 

What if an employee goes on maternity/paternity leave?  

Once an employee is on maternity or paternity leave, they must still receive the car scheme benefit. The responsibility for this goes to the employer.  

The employer must cover payments for the car if the employee’s pay goes below the statutory minimum.  

An employee leaves 

If an employee leaves your company whilst in a car scheme contract, then the payments of the vehicle is the responsibility of the employer to pay. This can include any remaining costs of the car. 

Is there a solution to this? 

Yes! OSV’s Early Termination Insurance. This covers you for: 

• Employee resignation  
• Long-term sickness absence  
• Accidental death  
• Maternity  
• Adoption and Paternity  
• Loss of license on medical grounds 

For more information get in touch with us today. 

Is salary sacrifice worth it for my company?

By now you may be thinking: “Is salary sacrifice worth it for my company?” 

If you already have business goals in place such as improving employee engagement and retention, or possibly recruiting the best talent then an electric car salary sacrifice scheme is well worth considering.  

Not only will you be growing your business and boosting workplace and employee morale, but your company will be saving money. 

On top of this, your company’s green credentials will be greatly improved – something all businesses should strive to do with the 2030 ban on the sale of new ICE cars approaching.

Salary sacrifice employers FAQs 2023

• What is salary sacrifice? 
• How does car salary sacrifice work? 
• Are salary sacrifice car schemes worth it? 
• What are the benefits of salary sacrifice for employers? 
• What are the disadvantages of salary sacrifice for employers? 
• Can salary sacrifice reduce tax? 
• What should you consider before doing a salary sacrifice scheme? 
• What if an employee leaves? 
• What if the employee damages the car? 
• Do companies need to have a certain number of employees to offer salary sacrifice? 
• Can sole traders and the self-employed set up a scheme?
• Should salary sacrifice appear on pay slips? 
• What do I need to tell HMRC? 
• What if an employee goes on maternity/paternity leave? 
• Does it cost my company anything? 
• Am I responsible to pay for the car? 
• Will it save my company money? 
• How old does the company have to be? 
• Can I do a salary sacrifice as the company owner? 
• Should my company set up salary sacrifice? 

Salary sacrifice is a fantastic opportunity for employers. Although it can seem like quite a complex concept, we’re here to change that.  

Read on for all the frequently asked questions about salary sacrifice for employers. 

What is salary sacrifice? 

Salary sacrifice is an opportunity for employers to retain or gain new employees. Offering a salary sacrifice car scheme to employees can bring great benefits for a company, such as increased employee retention, engagement and loyalty. It can also save businesses big bucks. 

It works by sacrificing a portion of an employee’s salary and putting this towards an employee benefit. The most popular salary sacrifice scheme is for electric cars. 

How does car salary sacrifice work? 

A salary sacrifice car scheme works by taking a portion of an employee’s salary, and in return, they get a brand-new car. 

The benefit here is that employers are offering employees a new electric car for much less than if they were to buy it outside of salary sacrifice.  

This is an opportunity for employees to drive an electric car that they otherwise might not be able to afford without the help of their employer. That’s right – expect a ‘Best Boss in the World’ mug at the Xmas party! 

Are salary sacrifice car schemes worth it? 

In an employee’s life, a car will be one of the biggest costs they make – on par with their house. As an employer providing a new car, this is undoubtedly a high-value favour.  

If you’re looking to retain existing employees and want them to feel appreciated, a salary sacrifice car scheme is a fantastic opportunity to do this. Not only will they feel seen and heard, but they are likely to stay loyal if their needs are being met. 

In car schemes for salary sacrifice, the cars leased are on corporate discounts. Which means vehicles are available at a reduced cost. For employers, this means access to fleet discounts. 

What are the benefits of salary sacrifice for employers? 

Benefits of salary sacrifice for employers include: 

• Employee retention 
• Attractive employee benefit 
• Helps reach your company’s environmental goals 
• Lower business expenses 
• Pay less National Insurance contributions for employers and employees  
• Vehicle fleet discounts available at the corporate rate  

What are the disadvantages of salary sacrifice for employers? 

• If an employee leaves then the car payments are left for the employer to pay – enquire for OSV’s solution 
• Employers are liable for the credit and return condition of the vehicle – get in touch for solutions for return condition 
• It uses up credit lines 
• Need to pay Benefit-In-Kind National Insurance tax 

Can salary sacrifice reduce tax? 

One of the many reasons salary sacrifice is a popular scheme is due to its tax benefits.  

Both employees and employers benefit from paying less income tax and National Insurance contributions.  

This is because the salary is being reduced, therefore the percentage amount reduces with it.  

What should you consider before doing a salary sacrifice scheme? 

Before setting up a salary sacrifice scheme for your company, you should finalise which electric car scheme would best suit your employees and company.  

Start with this list of the UK’s best electric car salary sacrifice scheme providers. 

Next, you should consider the type of support you will need in setting up a salary sacrifice scheme: 

• Do you need an account manager to help set up and run the car scheme? 
• Do your employees need valuable information about salary sacrifice or electric cars? 
• Would an employee salary sacrifice portal be worthwhile?  
• Do your employees want access to the latest salary sacrifice electric car offers?  
• Are various methods of virtual contact something that is needed for you and your employees?  
• Would an all-in-one EV package including a home charger and installation be useful for your employees?  

What if an employee leaves? 

When an employee leaves, for whatever reason, this can leave employers with ‘debt’ as such, as they are responsible for the remaining costs of the car.  

The employer can either continue to pay the monthly payments OR can pay an early termination fee. 

An early termination fee is the responsibility of the employer. However, employers can protect themselves from this risk with ETI and a good salary sacrifice policy. 

OSV offers an attractive Early Termination Insurance (ETI), ensuring you are covered for all areas of changes – subject to terms and conditions. 

What does ETI cover? 

• Resignation 
• Long term sickness absence 
• Accidental death 
• Maternity 
• Adoption and paternity 
• Loss of licence on medical grounds 
• Maternity/paternity/adoption leave 
• Expatriation 

It’s worth noting you cannot claim ETI within the first 3 months of your contract, and the first 9 months for maternity, adoption and paternity leave. 

Another note for employers; when an employee takes maternity, adoption or paternity leave, the employer must continue to provide the vehicle. 

What if the employee damages the car? 

If the car is damaged during the contract, the vehicle must be repaired by the employee either through insurance or at their own cost.  

Note: employers are liable for the return condition of the vehicle. Whilst fair wear and tear are allowed you should revise what damage is acceptable by the BVRLA. 

Do companies need to have a certain number of employees to offer salary sacrifice? 

No, according to HMRC there is no stated size a company has to be to take part in a salary sacrifice scheme.  

Can sole traders and the self-employed set up a scheme? 

No. HMRC states you need to be an employee to benefit from a salary sacrifice scheme.  

This is because the employee and employer agree to alter the terms and conditions of employment for the employee to receive a benefit in lieu of salary. 

Should salary sacrifice appear on pay slips? 

Yes. It should be evident on pay slips when an employee is in a salary sacrifice scheme.  

The contributions should clearly show the deductions made before tax and national insurance contributions are applied. 

If the employee’s salary sacrifice doesn’t appear clear on pay slips, you must raise this with your payroll department immediately.  

What do I need to tell HMRC? 

You do not need to report anything to HMRC about offering a salary sacrifice scheme. When it comes to reporting the end-of-year expenses at the end of the tax year, then you must report the benefits.  

Usually, HMRC likes to see: 

• Evidence of the variation of terms and conditions (if there is a written contract) 
• Pay slips before and after the variation 

What if an employee goes on maternity/paternity leave? 

If an employee goes on maternity or paternity leave whilst on the salary sacrifice car scheme, the car payments are left to the employer to cover.  

There is a way around this to avoid any surprise costs. Early Termination Insurance covers employee leave including parental leave.  

Does it cost my company anything? 

Salary sacrifice can be completely free to set up – depending on the provider you choose. OSV offers a free set up for a standard salary sacrifice car scheme. For a more bespoke service, there is a fee – however other providers do not offer this option at all. 

As the employer, you pay the initial upfront cost for the car and the employee pays you back over the course of the agreement. 

Salary sacrifice car schemes actually save employers money due to paying fewer employee national insurance contributions. 

If anything, companies can end up making money from salary sacrifice schemes. 

Am I responsible to pay for the car? 

As the car is hired on a salary sacrifice, it is not owned by the employee. It is a company car, leased by the business.  

So, the employee is sacrificing a portion of their salary to pay for the car. However, payments can fall onto the employer if the following happens: 

• An employee leaves due to maternity, paternity or adoption leave 
• An employee is absent due to long term sickness 
• Accidental employee death 
• An employee loses their driving license on medical grounds 
• An employee resigns 
• An employee is expatriated  

OSV offers Early Termination Insurance to cover any of these events. 

The employee is responsible for costs such as charging the car, parking fines, repairs for any damages, going over the agreed annual mileage and any increases in road tax. 

Will it save my company money? 

Yes! Not only are you offering tax and national insurance (NI) reductions for your employees, but as an employer, you pay less employee NI contributions too. Win-win! 

How old does the company have to be? 

According to HMRC legislation on salary sacrifice for employers, there is no stated length in days, months or years of how old a company has to be to offer a salary sacrifice scheme to its employees.  

Can I do a salary sacrifice as the company owner? 

HMRC states the definition of a salary sacrifice scheme as “an agreement to reduce an employee’s entitlement to cash pay, usually in return for a non-cash benefit”.  

There is no mention of any employer or company owner being allowed to benefit from this salary sacrifice agreement.  

Technically a director of a company is an employee of a Limited company, so they would be eligible. But, depending on how the director is paid will depend if it’s worthwhile – this is a question for your accountant.  

Should my company set up salary sacrifice? 

Now that we’ve gone through what salary sacrifice is, how it works and the most important frequently asked questions about salary sacrifice, do you think your company should set up salary sacrifice? 

If you are looking to increase employee retention, engagement and loyalty, save your business money and increase your company’s green credentials – then it really is a no-brainer. 

Are there any questions we’ve missed? If so, share them in the comments below and we will respond to your query. 

What are the disadvantages of salary sacrifice car schemes?

• Disadvantages of salary sacrifice for employees
  • When shouldn’t you do salary sacrifice for a car?
  • Why shouldn’t you do salary sacrifice on a petrol or diesel car?
• Disadvantages of salary sacrifice for employers
  • When would salary sacrifice not be worth it?

Salary sacrifice car schemes are the new kid on the block, and although they have many attractive advantages, what are the disadvantages of salary sacrifice car schemes?  

The downsides of salary sacrifice completely depend on the scheme you choose. Some may only offer a limited number of cars; usually valuable resources and an employee portal is available but this isn’t the case for all salary sacrifice car schemes.  

When shouldn’t you take part in a salary sacrifice scheme? Why is it better suited for electric cars? And, when is salary sacrifice simply just not worth it? Read on for everything you need to know… 

Disadvantages of Salary Sacrifice for Employees

When shouldn’t you take part in a salary sacrifice car scheme? 

So, perhaps you’ve heard the benefits of a salary sacrifice car scheme, such as saving up to 40% in taxes. Who wouldn’t want to save money?!  

Whilst these benefits are tempting, it’s important to consider when you shouldn’t take part in a salary sacrifice scheme.  

Need flexibility 

If you are someone who is often quite indecisive and changes your mind, it’s vital to remember that an employee cannot hand the car back if they change their mind about the car. 

We would recommend thoroughly researching beforehand to get an idea of what you like. Consider what your needs are and what you want to be getting from a car that you will be driving every day. A good place to start is watching car reviews. 

Lower incomes 

If you have a lower income, then it’s likely a salary sacrifice car scheme won’t be ideal for you, as it could take you below the minimum wage. You should also consider any other big payments you are making such as a mortgage, loans or rent, and how another payment on top would affect your day-to-day lifestyle.  

Reduction of salary 

If taking part in a salary sacrifice car scheme were to reduce your salary below the minimum wage threshold, then not only are you not allowed to partake in the scheme, but it also would be an extremely irresponsible idea.  

Why is this? 

Reducing your salary could impact a few things including: 

• Credit or mortgage applications 
• Pension amounts 
• Life cover offered through work 
• Level of maternity pay you receive 

It’s vital you consider all aspects and consider whether this is suitable for you. 

Intention to buy 

If you are intending to purchase the car at the end of the agreement, then a salary sacrifice car scheme is not ideal for you. 

Nearly all schemes do not offer a purchase option at the end, and if they do, the value of the car cannot be known until the final month of the agreement. 

On the plus side, a salary sacrifice car scheme means not worrying about the depreciation of the value of the car.  

Instead of worrying about this, you can look forward to getting a brand-new car after the scheme.

Restricted mileage 

If your daily commute or annual trips often vary, and predicting your annual mileage is tricky, it’s important to know that in a salary sacrifice car leasing scheme your mileage is limited.  

You usually sign up and agree to a set number of miles per year, and this can be between 5,000 and 40,000 miles a year, most salary sacrifice cars are relatively low mileage at around 7,000 miles a year. 

Drivers do have the option to increase their mileage by paying a little more each month, and the agreed annual mileage may be altered during the agreement. 

However, this is at the discretion of your finance provider, so you would need to contact them to request amending the annual mileage. 

Most do not allow drivers to amend the mileage within the first 12 months of the contract, but we would advise contacting the finance house directly to understand their terms and conditions. 

Why shouldn’t you do salary sacrifice on a petrol or diesel car? 

It’s likely you’ve heard a lot about salary sacrifice car schemes on electric cars more than petrol and diesel models. There is good reason for it. 

Electric cars have an outstanding number of pros when you get one through salary sacrifice. 

Even without salary sacrifice, EVs promise reduced maintenance and charging costs, ULEZ (Ultra Low Emission Zone) and CAZ (Clean Air Zone) exemptions and much more. 

Through salary sacrifice, electric cars return a much much lower BIK (Benefit-In-Kind) rate than their fuel counterparts.  

Currently, as of 2023/2024, EV owners are expected to pay 2% BIK. For diesel and petrol drivers, this goes right up to 37% BIK.  

That’s less money in your pocket, and more CO₂ in the air. 

Disadvantages of Salary Sacrifice for Employers 

When would salary sacrifice not be worth it? 

So now we understand how salary sacrifice can affect your finances, and how it is better suited for electric cars, how about when salary sacrifice would not be worth it? 

Employee leaves 

Life can be unpredictable; changes happen and sometimes employees leave. What does this mean for the employer? 

This can leave employers with ‘debt’ as such, as they are responsible for the remaining costs of the car.

What can the employer do when this happens? 

They can either continue to pay the monthly payments OR they can pay an early termination fee. 

An early termination fee is the responsibility of the employer. However, employers can protect themselves from this risk with ETI and a good salary sacrifice policy. 

OSV offers an attractive Early Termination Insurance (ETI), ensuring you are covered for all areas of changes – subject to terms and conditions. 

What does ETI cover? 

• Resignation 
• Long-term sickness absence 
• Accidental death 
• Maternity 
• Adoption and paternity 
• Loss of licence on medical grounds 
• Maternity/paternity/adoption leave 
• Expatriation 

It’s worth noting you cannot claim ETI within the first 3 months of your contract, and the first 9 months for maternity, adoption and paternity leave. 

Another note for employers; when an employee takes maternity, adoption or paternity leave, the employer must continue to provide the vehicle. 

Why is this? 

The employee will receive statutory pay for their leave, and the salary cannot be sacrificed from this. So, the employer must cover the costs of the vehicle throughout the time the employee is on leave. 

Should you sign up to a salary sacrifice car scheme?

Now that we’ve gone through the cons of salary sacrifice when getting a car, does this sound like something appealing to you? Remember, a salary sacrifice car scheme is only available once the employer has signed up for one. 

If the disadvantages haven’t put you off, and this does sound like something valuable to you, OSV can help.  

Many suppliers assume employers have a fleet team ready to manage all the admin and paperwork, and often don’t offer the help. OSV’s salary sacrifice scheme is designed to take the weight of your shoulders.  

Setting up a salary sacrifice scheme for employees in 2023

• How can your company benefit from Salary sacrifice? 
• What to consider before setting up a salary sacrifice scheme 
• How do you set up a salary sacrifice scheme?  
• Should you set up a salary sacrifice scheme? 

Do you need advice on setting up a salary sacrifice scheme for your company? Well, you are in the right place. There are many reasons both employees and employers are falling in love with salary sacrifice schemes. 

From employees saving up to 40% in taxes and employers paying less national insurance contributions, it’s no wonder salary sacrifice electric car schemes are becoming the new way to get a car. 

Although we can expect salary sacrifice to take over, not many employees are even aware of its existence. It is imperative to educate staff about this employee benefit, as there is no point in setting up a salary sacrifice scheme if your employees aren’t interested. 

How can your company benefit from setting up salary sacrifice? 

• Employee retention 
• Attractive employee benefit 
• Helps reach your company’s environmental goals 
• Lower business expenses 
• Pay less National Insurance contributions for employers and employees 

What to consider before setting up a salary sacrifice scheme: 

• What are your company goals? 
  • Is employee retention a key goal? 
  • Do you want to boost your company’s green credentials? 
  • Do you want to attract new talent? 
  • Do you want to increase staff productivity and engagement? 

Understanding what your company wants from an electric car scheme is a vital first step to ensuring you select the right one for your employees and business. 

• What do your employees want? 
  • Do they need a better understanding of salary sacrifice? 
  • Are they even interested in the scheme? 
  • Is there a brand or type of electric car everyone likes? 
  • What is their budget? 
  • Do they need extra add-ons such as a home charger and installation? 

It’s questions like these which will help find the perfect scheme for your staff, also saving time and money in the long run. 

What is the point in setting up a scheme that doesn’t suit your employee’s needs? Make sure to listen to your employee’s wants and requirements. 

• What is your company budget? 
  • Salary sacrifice schemes can vary in cost to set up, however, you should budget for emergency spending in case the following occur: 
    • An employee resigns or leaves the company costing the business an early termination fee – this can be avoided with Early Termination Insurance (ETI) 
    • An employee is on long-term sick leave leaving the lease costs to the company – this is covered under ETI 
    • The car is returned exceeding fair wear and tear conditions 

What is Early Termination Insurance? OSV offers this insurance which gives coverage for situations such as those mentioned previously. ETI gives the employer protection against charges for returning a lease vehicle early, subject to terms and conditions. 

Remember, although any lease costs and fees can be deducted from an employee’s pay, the employer must cover the costs first. 

Before setting up a salary sacrifice scheme for your company, you should finalise which electric car scheme would best suit your employees and company. Start with this list of the UK’s best electric car salary sacrifice scheme providers. 

Next, you should consider the type of support you will need in setting up a salary sacrifice scheme: 

• Do you need an account manager to help set up and run the car scheme? 
• Do your employees need valuable information about salary sacrifice or electric cars? 
• Would an employee salary sacrifice portal be worthwhile?  
• Do your employees want access to the latest salary sacrifice electric car offers? 
• Are various methods of virtual contact something that is needed for you and your employees? 
• Would an all-in-one EV package including a home charger and installation be useful for your employees? 

Understanding the support that you and your employees need will help narrow down the perfect salary sacrifice scheme provider for you. 

How do you set up a salary sacrifice scheme? 

So, now you know what to consider before setting up a salary sacrifice scheme, what about actually setting one up?  

Let’s go over how to set up a salary sacrifice scheme… 

1. Find your ideal electric car salary sacrifice scheme provider 

Remember to find what best suits your employees, after all they are the ones who will be mostly impacted by the scheme your company chooses. 

We would advise selecting a provider that takes the weight off your shoulders. This means managing the entire process, from researching cars and organising breakdown cover and maintenance packages, to answering all questions employees have along the way.  

The salary sacrifice car scheme process is different for each provider. We would advise choosing your provider based on the needs of your staff, rather than selecting a provider that promises a fast salary sacrifice turnaround time.  

A fast-paced scheme that doesn’t fully suit the needs of your staff, increases high risk of problems later down the line such as employee turnover and decreased engagement.  

If the employees don’t feel listened to and don’t feel their needs are being met with the right car or driving requirements, why would they stick around? 

OSV follows a consultative process to ensure we fully listen and understand the needs of the driver. We pride ourselves on our human-oriented values and working in the motor trade since 1997. 

So, what happens in an OSV salary sacrifice car scheme? 

OSV’s salary sacrifice process: 

1. Book a consultation to discuss your needs and set up requirements 

2. Fill out finance proposal form to get pre-agreed credit lines 

3. Fill in an insurance application to get pre-approval 

4. Provide us with key contacts and who has what authority in the company 

5. Receive a unique customer code 

6. Drivers register and login via the Salary Sacrifice Portal 

7. Employees can run quotes on the portal 

8. Pick colour, extras and personalise the vehicle 

9. Order the car via the portal 

What else is included in OSV’s salary sacrifice scheme? 

• Payroll advice including how to do HMRC reporting 
• Tailored web portal for employees 
• Communication advice about the scheme and its impact to employees 
• Creating general policies 
• Car maintenance package (charged per vehicle) 
• Early Termination Insurance (charger per vehicle) 
• Car insurance 
• Optional relief vehicle 
• Quotation engines and calculation tools e.g. EV cost per mile calculator 
• Salary sacrifice policies 
• Your very own salary sacrifice expert will carry out FREE consultations with each staff member that is interested 

Please be aware that the following is not included in the scheme: 

• Your order sign-off and eligibility of employees to the scheme 
• Submission of P11d information to HMRC 
• Employee dispute advice 

2. Make a business plan 

Once you know what your chosen salary sacrifice car scheme offers, get in touch with the provider to find out their process and what you need to do on your side.  

This will make your life a lot easier when creating the plan for launching the scheme in your company.  

What should the plan include? 

• Explanation of how the scheme works with your company 
• The benefits AND disadvantages of the scheme 
• Risk management factors covering employees leaving or resigning 
• A timeline from setting up the salary sacrifice scheme to employees receiving their car 

Once you’re happy with the plan, next you should educate your staff to get an idea of how many will sign up for the scheme. 

Choosing how you communicate this information will be vital to the success of the scheme. For effective communication with employees, we recommend regularly discussing the benefits of setting up a salary sacrifice scheme. 

This can be done through an open discussion in regular meetings, or more formal ways are through email, newsletters, staff magazines or forums.  

3. Educate your employees 

Salary sacrifice can be a tricky one to grasp at first, which is why it is so important to regularly engage with your employees and remind them how it works.  

Staff may misunderstand the implications the scheme has on their tax, salary, applying for a mortgage and their pension scheme. 

It is vital your employees fully understand how the scheme will affect them personally, but also regularly talk about the benefits, and why it will be well worth their while to sign up. 

To avoid any employees missing out, we recommend creating a company-wide email for an introduction to salary sacrifice car schemes and their benefits.  

You could introduce the scheme and ask staff to express interest if they would like to take part, use our article on Salary Sacrifice: Explained for a thorough and easy beginner’s guide to salary sacrifice car schemes. 

4. Remind your staff of the benefits & disadvantages 

Once your employees have been educated on why setting up a salary sacrifice scheme is a good idea, you should prioritise reminding them of the benefits and why they should sign up. 

Remember to utilise your provider’s resources on the scheme. Salary sacrifice is a complex concept. So, a good place to start is to send content such as ‘What is Salary Sacrifice’, the benefits of salary sacrifice for the workplace, and a list of FAQs to answer any questions they will likely have. 

This will not only provide the support your employees need, but it will also save you a huge amount of time. 

If your provider assigns an account manager to support your employees, make sure to use them! OSV’s Salary Sacrifice specialists assist with car research and selection, delivery, and business assistance including payroll advice, HMRC reporting and all car-related queries. 

5. Sign up for your salary sacrifice car scheme 

Once you are confident and ready in the salary sacrifice car scheme provider, there is no requirement to send anything to HMRC initially.  

The only time they must be advised is when you send your Benefit-In-Kind return once a year. 

When an employee opts into a salary sacrifice scheme, it is the employer’s responsibility to amend the contract accordingly. This must include the correct payments and deductions of tax and National Insurance contributions for the employee benefit, which in this situation will be the electric car. 

Need payroll advice and help reporting contract changes to HMRC? Get in touch with a salary sacrifice specialist today for expert knowledge and guidance. 

Should you set up a salary sacrifice scheme? 

If we take into consideration the huge number of benefits up for grabs, for both parties, setting up a salary sacrifice scheme seems like a no-brainer.  

With OSV, setting up a salary sacrifice scheme is a very simple process, we work to take the weight off your shoulders. 

If you think an electric car scheme would be beneficial for your company and are considering setting up a salary sacrifice scheme, the best place to start is OSV’s Salary Sacrifice Hub. Discover the benefits of salary sacrifice, FAQs, guides and more. 

When you have spoken to your employees, and both you and they are ready to get the ball rolling, we are here to help and support you both along the way. 

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