Salary sacrifice lead times

[Sarahnjon]

Morning all

I have finally placed an order for an A3 sportback through salary sacrifice, just wondered if anyone else has experience of this and how long it took for car to arrive

thanks

 

[Vertigo1]

What on earth is "salary sacrifice"?

 

[Sarahnjon]

Hi

Salary sacrifice is sacrificing a portion of salary in exchange for a lease car

 

[Vertigo1]

Ah right I'm with you now - so rather than private leasing, it's leased by your employer as a company car would be but they effectively deduct the cost from your salary? Didn't realise there was an "official" term for it

I'd assume lead times would be the same regardless of how it's sourced. I'm on my sixth company car and the least companies usually source them through a preferred dealer. The ones which have been factory orders have varied from two to four months from order to delivery for me.

 

[Sarahnjon]

Thanks for that info, just got a bit worried about some people on the forum saying 7-8 months. I think the lease company are alphabet

 

[Vertigo1]

I think, or at least hope, that 7-8 months is a bit extreme but I'm hearing loads of stories of delays with the saloon and have no idea how long mine is going to take.

Never thought about the salary sacrifice way of doing it but guess it could make sense. Business leasing is cheaper than personal because the company can claim half the VAT back on it plus there are often better deals to start with. You save paying the income tax on the salary you sacrifice to fund the car but then have to pay P11D tax on the car you receive. Depending on the value of the car and the emissions band it's in, plus what tax rate you're paying, it could work out quite beneficial

 

[Pulp84]

I was in my dealers booking it in for warranty work Friday and saw my salesman - he told me he is quoting end of December / Jan 15 build dates for S3 SB ? He said A3's are October / November builds. However he might just have a poor allocation.

i think it is very possible you will have it within a few months of Christmas.

 

[aupperton]

My A3 is also on a Salary Sacrifice scheme. Ordered in June 2013 arrived in Dec 2013 so 6 months.

Cost of the car is taken from your salary before Tax and NI making it cheaper than a PCP or personal hire purchase deal.

 

[Vertigo1]

I was in my dealers booking it in for warranty work Friday and saw my salesman - he told me he is quoting end of December / Jan 15 build dates for S3 SB ? He said A3's are October / November builds. However he might just have a poor allocation.

A lot of it is down to allocation at each individual dealer - there may be plenty of build slots available but if your dealer has used up their allocation they'll have problems. Of course they won't want to tell you this for fear you'll go elsewhere. With lease companies you're trapped with whatever dealer they're using.

My A3 is also on a Salary Sacrifice scheme. Ordered in June 2013 arrived in Dec 2013 so 6 months.

Cost of the car is taken from your salary before Tax and NI making it cheaper than a PCP or personal hire purchase deal.

But of course you pay P11D tax on it which you wouldn't with a personal contract, although I agree this will usually be far less than what you save through income tax and NI.

If anyone doing this doesn't mind divulging details, I'd be interested to know exactly how the finances work out on such schemes.

 

[Pulp84]

It seems most of these salary sacrifice schemes are similar.

My company one works as follows:-

- Car is sourced and ordered through usual company car scheme.
- The employee pays the lease cost before tax / NI. Lease cost much lower than can be found on high street due to the buying power of the company.
- Employee pays company car tax rate on the vehicle.
- My BMW 320d Sport is £422 a month to lease (including £4k of options) and the tax is £69 a month. As I am certain grade the employer pays the lease cost and in effect my monthly cost is just the £69 a month tax. I know the costs because on the system we use (Lex) it gives you both the company car tax costs and lease values.
- My company quotes all contracts as full maintained (tyres, insurance for all family members at same address, servicing etc).

I have yet to see a quote on our scheme that I thought was a bargain. But when you consider that the lease cost is fully maintained it is actually very good value.......

 

[Sarahnjon]

Hi

I have been quoted £310 to include everything and that is including benefit in kind tax, tbought that was a mighty good deal

 

[ctcampbell]

I put an order in for an A1 with all the options through Hitachi Capital on my work scheme. The deal was £450pm with servicing and insurance.

Then I phoned the dealer who ultimately got the order and he told me he could do a base S3 for the same price. So now I'm paying for service/insurance myself which makes it about £100pm more but I'm getting way more car. The BiK saving isn't so good on anything other than the most clean of engines.

 

[siybee]

This is exactly what I did, see the build week 27 thread, ordered end of March, car arrived last week

 

[Vertigo1]

Hi

I have been quoted £310 to include everything and that is including benefit in kind tax, tbought that was a mighty good deal

That's a pretty good deal. The lease on mine is around £400 a month although it has a good few grand's worth of options which always rack up the cost. I get hammered on the BIK tax though at 40%

 

[ctcampbell]

That's a pretty good deal. The lease on mine is around £400 a month although it has a good few grand's worth of options which always rack up the cost. I get hammered on the BIK tax though at 40%

That's the thing, if you earn well it's makes it a minimal saving.

 

[royalsteve68]

best deal at the moment in the golf r for £225/mth at 5K miles or £266/mth at 10k miles at national vehicle rentals - no idea what they are like as a lease company but an amazing deal

 

[royalsteve68]

agreed, it may have been cheaper to take the salary and pay themselves privately

 

[Acri16]

It took me 7 1/2 months for delivery though Knowles Fleet.

The salray sacrifice allows for hassle free motoring and getting the car you want, along with associated costs for one payment (before tax, pension & NI contributions)

 

[Pulp84]

best deal at the moment in the golf r for £225/mth at 5K miles or £266/mth at 10k miles at national vehicle rentals - no idea what they are like as a lease company but an amazing deal

I thought these deals were gone now for retail buyers? VW Finance had put a stop to them as it was business only? Loads of dealers apparently playing the system. On my Lex system at work Golf R has gone from £259 a month to £370 odd for the personal scheme.

 

[discodeek]

Ordered hatchback about 5 weeks ago through salary sacrifice - looking at late November I'm told.

 

[Reggieboy71]

I was quoted £380 p.m for A3 SB 1.4 COD S tronic with only metallic paint and comfort pack as extras through Salary Sacrifice. Company we use is Lex. Fair enough that includes servicing,wear & tear and insurance but thought it was quite steep. Delivery would be 6 months.

So decided to go to a dealer myself and got the same car with options for £260 p.m. Have to do insurance and other bits myself and that was also including trade in on my current car( got £5000 for it).BW 36 for delivery mid October!! Done it through PCP.

 

[glospete]

If your schedule is anything like mine, my car was delivered to Audi Exeter 2 weeks to the day after it was built! So you'd be looking at mid to end September

 

[Vertigo1]

I was quoted £380 p.m for A3 SB 1.4 COD S tronic with only metallic paint and comfort pack as extras through Salary Sacrifice. Company we use is Lex. Fair enough that includes servicing,wear & tear and insurance but thought it was quite steep. Delivery would be 6 months.

So decided to go to a dealer myself and got the same car with options for £260 p.m. Have to do insurance and other bits myself and that was also including trade in on my current car( got £5000 for it).BW 36 for delivery mid October!! Done it through PCP.

Not really a direct comparison if your private price doesn't include insurance but includes the £5000 trade-in but yes, £380 sounds rather steep for that spec, depending on mileage allowance.

£260 sounds pretty good, how long's that for and what's the mileage allowance?

 

[Reggieboy71]

Vertigo1

PCP is for 3 years and mileage allowance is 8000 per year. My insurance is going to be £159 per year roughly with Esure. So just have tax and servicing to pay for. I think the salary sacrifice is for anybody who doesn't have a car to trade or deposit to put down.

When I looked at the same car and options back in March,the monthly figure was £310,so they have put the price up a bit.

 

[Reggieboy71]

Glospete

Here's hoping!! The suspense is killing me....Should have ordered around April time when I realised I wasn't going to go down the company lease route,would've had it by now,but hey ho it's done now.

 

[Pulp84]

Not really a direct comparison if your private price doesn't include insurance but includes the £5000 trade-in but yes, £380 sounds rather steep for that spec, depending on mileage allowance.

£260 sounds pretty good, how long's that for and what's the mileage allowance?

Not sure how other people's lease schemes work though their employer but mine you pay the lease cost before tax and NI.

The thing to consider is how much would you have to earn AFTER tax and NI to be able to pay the £380. If you had to pay £380 lease cost after paying tax / NI yes that would be expensive

 

[Reggieboy71]

Pulp84

The £380 per month is after tax and NI deductions. Gross salary sacrifice is £430 per month at 20% Tax. Even with everything included seems very high.

 

[Pulp84]

Yep that's terrible!

Is that Lex by any chance?

 

[Reggieboy71]

Yes it's Lex!! Would have used them had the monthly payment been favourable,then I could've sold my car privately and pocketed the cash!!

 

[Pulp84]

Yeah my company uses Lex. Hence I knew your quote must be from them!

They are pants to be fair. My company farmed it out to them a few years ago after winding down our own leasing company.

They also do PCP deals for my us, but (LOL) my company has some Eco policy meaning they will not finance or buy any car with more than 140gm co2. S3 fails on that test !

 

[Reggieboy71]

Yes that's the same with ours. No cars on offer above 120gm co2.Not much choice to be fair!!

 

[Pulp84]

That's even worse! Lol.

 

[Vertigo1]

Not sure how other people's lease schemes work though their employer but mine you pay the lease cost before tax and NI.

The thing to consider is how much would you have to earn AFTER tax and NI to be able to pay the £380. If you had to pay £380 lease cost after paying tax / NI yes that would be expensive

The £380 per month is after tax and NI deductions. Gross salary sacrifice is £430 per month at 20% Tax. Even with everything included seems very high.

It seems to make little sense to have to pay out of your salary after deductions. Surely the whole point is that the company can take the necessary amount at source so income tax and NI aren't applied, thus effectively making your money go further. Of course you're then liable for BIK tax but, providing you choose a model with low emissions and are paying tax at 20%, this should work out way lower than what you're gaining by not paying the tax and NI.

If you pay the money back to the company after deductions then the only real benefit is availing yourself of the better business leasing rates the company gets. They're also able to claim back half the VAT on the lease (and all of it on the maintenance) which obviously you can't do with private lease contracts.

 

[Pulp84]

It seems to make little sense to have to pay out of your salary after deductions. Surely the whole point is that the company can take the necessary amount at source so income tax and NI aren't applied, thus effectively making your money go further. Of course you're then liable for BIK tax but, providing you choose a model with low emissions and are paying tax at 20%, this should work out way lower than what you're gaining by not paying the tax and NI.

If you pay the money back to the company after deductions then the only real benefit is availing yourself of the better business leasing rates the company gets. They're also able to claim back half the VAT on the lease (and all of it on the maintenance) which obviously you can't do with private lease contracts.

My company used to do a straight forward lease that was paid as a direct debit separate to any salary arrangement. That's why I asked the question as can vary employer to employer. With our scheme you still got the discount but had the option of doing it as a finance lease (no deposit and full maintained) or the usual PCP.

They have scrapped that and gone down the salary deducted lease scheme on our company car scheme now.

 

[Reggieboy71]

Vertigo1

Totally agree. Doing it through work is meant to save me money!!! but when I went on to the Lex Autolease configurator the car and options showed Gross salary sacrifice @ £430 p.m and the 'pinch' that I would feel is £380 pm after deductions.

Maybe it's the agrement the company has with Lex that makes it sound strange!! no idea. Paying out £260 p.m from my take home pay on a PCP seemed the better option.

 

[Reggieboy71]

Maybe the monthly amount seems high as the car is brand new,no deposit to pay and full maintenance , road tax,wear and tear,over either 2 or 3 years.

 

[Andrew_Bu]

Our scheme is either car allowance of £4k per annum (gross before tax and NI) or company car which is leased over a four year term.

The allowance works out at £380 net per month when factoring in the tax saved on not having a benefit in kind. Sounds a lot but to finance, insure and maintain the A3 I wanted would've been significantly more. The only running cost that I have to pay for under the company car route is fuel.

The downside is that, from 6 April next year, the benefit charge is increasing by 2% per annum. The 3% surcharge currently in force for diesels disappears from April 2016 but that wont affect me with the new A3 as I've gone for the 1.4TFSi. It will probably mean that this will be the last company car that I have as it will get more and more expensive to have one.

Still, I'll save £60 per month when the A3 arrives. My current Volvo S60 diesel has emissions of 139g/km which creates a 23% charge. The A3 is only 109g and, being petrol, suffers a 14% charge in the current year. So, despite having a much higher list price, the A3 is significantly cheaper for me to have. Stupid system!

 

[Vertigo1]

Every time I do the maths on running my own car instead of a company one there's never much in it. If I wanted to run an S3 or something else which pumped out CO2 then running it myself would be a no brainer but, providing I choose low emission cars it's a close run thing on the finances.

Personally I like the totally hassle free nature of company cars and not having to worry about anything other than sticking fuel in it

 

[Andrew_Bu]

Every time I do the maths on running my own car instead of a company one there's never much in it. If I wanted to run an S3 or something else which pumped out CO2 then running it myself would be a no brainer but, providing I choose low emission cars it's a close run thing on the finances.

Personally I like the totally hassle free nature of company cars and not having to worry about anything other than sticking fuel in it

I couldn't agree more. I just can't see the manufacturers being able to keep pace with the rate at which the government keeps lowering the emissions thresholds. Having a four year lease doesn't help either (employer will not change as doesn't want the hassle of having to sort new agreements more frequently).

 

[Vertigo1]

The manufacturers have been keeping pace with the government's rates for the last decade or two but they're starting to get harder and harder.

In four years time even my current 2.0TDI with 106g/km emissions would be costing me the thick end of £200 a month in tax

Next car arriving around November (hopefully) will be for three years - I fully expect my next one after that to be a hybrid.