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Demand growing for salary sacrifice car schemes, ACFO survey finds

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Author: | Updated: 28 Oct 2013 11:05

Salary sacrifice car schemes have enjoyed a boost in popularity in the last 18 months, according to research from ACFO.

More than a third of the company car drivers surveyed by ACFO (36%) say they are currently offered a car salary sacrifice scheme by their employer, up from 20% in March 2012.

ACFO chairman Damian James commented: “Salary sacrifice is one of many useful tools in the vehicle funding and employee benefits toolboxes and it is clear from ACFO’s survey that demand is growing.”

“From the survey results, it is also clear that some employers with several thousand employees and large fleets are using salary sacrifice as an alternative funding mechanism for company cars.”

Salary sacrifice car schemes have enjoyed a boost in popularity in the last 18 months

No interest

Nearly half of the 64% which can’t currently take advantage of such a scheme (48%) said their employer had held off on introducing such a scheme to evaluate what the benefits were.

However, for nearly a quarter of those (23%) said their employers have no interest in introducing a car salary sacrifice scheme. Reasons for their absence of interest included businesses being too small, job uncertainty opening up the possibility of early termination costs and the potential for a decrease in company car uptake.

Some believed that car salary sacrifice schemes were incompatible with company car schemes where premium badge cars were available and not beneficial as a replacement for “grey fleet” vehicles.

Others feared changes to international accounting standards that will result in all leased assets, including salary sacrifice scheme cars, being reported on a company’s balance sheet with a corresponding liability being incurred for future rental payments.

It is often argued that introducing a car salary sacrifice scheme for employees not eligible for a company car can reduce the size of an organisation’s ‘grey fleet’, shrinking a company’s carbon footprint and boosting an organisation’s focus on occupational road risk management as employer-sourced cars are regarded as easier to manage in terms of collating an audit of vehicle and driver documentation.

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