Leasing Model 3 via Salary sacrifice

[ParHunter]

Hi

my wife's work offer a EVs leasing via Salary sacrifice. The provider for this is Arval. In theory this should be an affordable way of driving a model 3 but I am surprised by the monthly leasing cost they are quoting.

Arval only offer 36 Month leasing deals via this scheme (they do offer 48 for normal leasing) and all deals include maintenance and insurance. You cannot have it without.

The price they are quoting for a Tesla Model 3 Standard Plus is
£802/pm as the salary sacrifice. So with a Tax rate of 40% that is quoted as £ 465.24/pm going up to £ 494.86 in the 3rd year because of changes in the BIK.

That figure of £802 sounds far too high! There is no deposit and it includes maintenance and insurance but
I have seen 'normal' lease quotes for the same car (and no deposit or only 1 month deposit) that comes in around

BridleVehicleleasing.co.uk (8000 miles/year, 36 month, incl maintenance)
Business: £503.08/pm excl VAT
Private: £603.69 incl VAT


Allcarleasing: (no maintenance)
Business: £465.60 excl VAT
Private: £558.72 incl VAT

I assume for comparison we would need to use the business lease quote. So how come their quote is £300/pm heigher?
Yes it does include insurance but that should only be £50-£70/month.

Has anyone else got a Tesla Model 3 via Salary sacrifice? What is your Total Gross Salary Exchange?

The odd thing is that they offer a lease for a Audo e-Tron for $447/pm (net sacrifcie).

I have asked them how that could be:

1. The costs can vary between manufacturers depending on what manufacturer discounts they provide. This is why you may see Jaguar and Audi coming in less than the Tesla.

The Audi is £20,000 more expensive than the Tesla!
They would also not provide a quote where the prices for the lease, the maintenance and the insurance is listed.

As anyone got a normal Business leasing deal with Arval? I have the feeling that once you a locked in with them (because the company chose them as the provider) they overcharge you on the additionals that you can't opt out of!

I am trying to collect enough information to challenge them on that quote.

 

[NorfolkMustard]

It does sound like they’re competing on the post tax cost and raking in a big profit on the difference.

 

[Winner365]

I’ve ordered a model 3 performance in midnight silver metallic with a 7kW pod point home charger too. My gross salary sacrifice cost was £975.13 - net £486.59

includes insurance, servicing, tires and breakdown

 

[Ben177]

Don’t underestimate what insurance and the other extras cost.

For reference my company also use Arval, and my gross deduction for a Performance is around £1100 over 36 months, £0 deposit.. Net it’s £700 ish (also 40% tax bracket) which given it includes 15k miles per year, business travel insurance for me and my wife, tyres, breakdown and any maintenance, it’s an absolute bargain.

Ignore the gross deduction. Unless that affects things like pension contributions, the net deduction is the only figure that matters as that’s what you actually ‘pay’ for the car. Use that for comparison purposes.

 

[philgods]

M3P
£770 gross / £390 net

 

[shuhockey]

£600ish- £360 after tax. LR 3 for three years including insurance and maintenance. Knowles NHS scheme, picked up in march.

 

[Ben177]

When posting your rates please give details of the mileage allowance, and whether or not your deal includes insurance, tyres etc, as well as the tax bracket applicable to your net cost. These things (especially tax bracket) often make a big difference to the cost, and enable people to compare apples with apples.

 

[Winner365]

I’ve ordered a model 3 performance in midnight silver metallic with a 7kW pod point home charger too. My gross salary sacrifice cost was £975.13 - net £486.59

includes insurance, servicing, tires and breakdown

40% tax. 7000 miles. With fully comp insurance for 4 people, tyres, servicing, breakdown cover, electric charge point installed

 

[twlr]

40% tax. 7000 miles. With fully comp insurance for 4 people, tyres, servicing, breakdown cover, electric charge point installed

What does Savings on Pension mean? Are somehow your pension contributions being used to pay for the car?

 

[browellm]

M3LR Red/White, 36m, 10kpa miles.

Business insurance, all maintenance, tyres. inc.
£729 gross, £505 net, lower rate tax band.

 

[Ben177]

What does Savings on Pension mean? Are somehow your pension contributions being used to pay for the car?

It’s one disadvantage of the NHS scheme. The car deductions reduce pension contributions. So when trying to work out the total cost over the term you need to take this loss of pension contributions into account.

Other schemes work differently.

 

[ParHunter]

It looks like there are big differences in price for the different providers.
E.g. browllm has a M3LR and only has a £729 gross reduction compared to my £802 on a Standard Plus (with only 25,000 miles over 3 years).
It looks like some companies fill their pockets with the add-ons like maintenance and insurance.

 

[fancealot]

Got to agree with others the initial reduction can look large, but as it's pre-tax (left side of a paycheck usually) the actual net drop in take home pay is less than that, with the NHS pension as an example it's based on 'career average pay' so in essence getting a lease decreases your annual salary and in turn affects your career average, meaning salary sacrifice can affect your pension.
Although, i've been in the NHS for 20 years i've been originally on the older final salary scheme which would mean less of an impact on my pension, I was automatically moved to the new scheme but hurrah it was deemed an illegal move by the NHS pension scheme so I have reverted back to final salary for a couple of years (and backdated the rest of my payments) so my last two lease cars haven't affected my pension, so that's a good thing for me!

Also the nil BIK is a major factor for me to switch as I could afford a higher priced vehicle (the Tesla) and in essence pay less per month on payments - not including decrease in fuel costs.

 

[Joelly]

it seems a little high, M3LR, white, 715 deduction, 460 after tax (lower rate and student loan). all servicing, maintenance, tyres, insurance included. 10kpa

 

[ElRey]

£600ish- £360 after tax. LR 3 for three years including insurance and maintenance. Knowles NHS scheme, picked up in march.

With Knowles as well. SR+ 10k miles including insurance, tires, maintenance. About £312 after tax. (40% bracket)

 

[Jibjab]

Is this a true company car scheme? I’m a bit out of touch if salary sacrifice = company car. If it is then it’s not really like for like when shopping around for a business or personal lease.

There’s no credit assessment/check made, if you lose/change your job you simply hand the car back with nothing to pay (leases are usually 50% of the remaining payments), usually no mileage limits (used to be the case 4-5 years back on the schemes I was in, might be different dependent on scheme), guaranteed hire car for an unlimited time if required (accident/maintenance), no excess insurance (not always the case, but usually lower than personal insurance), no insurance premium increase if you have an accident or points. Probably a few other benefits casting my mind back to when I used to have company cars Essentially it’s zero risk. Personally I’d pay a bit more for that simplicity. It looks like you can’t get a better deal privately though anyway, so unless your wife finds a new job with a cheaper scheme you have two choices I guess

 

[timidimage]

Hi, my company is looking to start a salary sacrifice scheme and are looking for a supplier. Most people want Teslas - I'm after a M3LR. As per OP I've seen a lot of deviation in costs. I'd be really grateful to understand which suppliers you/your company uses.
We've had a look at Fleet Evolution who seemed high, and Octopus who were about the same but put most of the risk on to the company.
We're a private company so I'm not sure if Knowles would work with us? The NHS pricing mentioned above looks a lot better.

 

[Ben177]

If it helps anyone, linked is a spreadsheet I used for comparing my salary sacrifice against open market lease providers, including Tesla lease. It factors in fuel, insurance, and tax to provide a monthly amortised amount for comparison.
As you can see, I couldn’t find an open market lease the even came close to the net price of my salary sacrifice, even though the gross deduction for the SS is very high.

Dropbox - Car Comparison Public.xlsx - Simplify your life

 

[gangzoom]

It looks like there are big differences in price for the different providers.

They are hugely different, especially between different NHS schemes, and you cannot 'shop around' for NHS schemes, the only one you have access to is the one your trust offers. Ours is awful, more expensive than even a 'normal' PCP scheme once you take into account pension reductions.

NHS pension effects is also hugely different for everyone, I have 30 years+ of working life ahead, so for me any reduction on my pension contributions now has a big effects, as the real growth in pensions comes from compounded interest over years and years. I'm on the new scheme but actually my salary is near the top end already, so any reduction future impacts on the 'average salary'.

Do you own maths for your specific situation, there some really cheap salary sacrifice options, but also some awful ones.

 

[Basicbob]

Hi

Got a standard plus in white no ads ons.

Im a 40% tax payer and I will be paying £394 for until April then 410 for year 2 then 425 in year three as the BIK increases from 0 to 2%.

This is net and includes types service and insurance.
It’s based on 5000 miles a year so 15 for the contract period. If I go over it’s 15p a mile.

The leasing company we use is Arval and I work in the private sector and it does not reduce my pension contribution.

the sting in the tail is I have a £1000 excess on the car and £250 on windscreen

other cars on the website were £250 excess.

just ran another quite right now and the monthly charge has jumped £50 a month.