Understanding car salary sacrifice schemes: From cost savings to sustainability

In our recent webinar, Cars, comms & cost savings: Unlocking the full value of salary sacrifice vehicles, Zach Ward, Communications Delivery Lead at Benifex, was joined by Phil Gillespie, Head of Commercial Partnerships at Tusker, to explore the growing impact of car salary sacrifice schemes.  

The session offered practical insights into how to support employees’ financial wellbeing while reducing costs and contributing to sustainability goals.  

Understanding car salary sacrifice  

Car salary sacrifice is an increasingly popular employee benefit, especially in the UK. It allows employees to lease a car – often electric – by paying via salary sacrifice.  

With this type of lease, the cost includes insurance, servicing, maintenance, and breakdown cover. For employees, it’s a fixed, worry-free way to drive that comes with cost and tax efficiencies. For employers, it means significant National Insurance savings.  

One of the experts in this field is the UK-based company Tusker. As Phil Gillespie explained, “Tusker are specialists in car salary sacrifice. We launched the UK’s first car salary sacrifice scheme back in 2008.” 

Today, as cost-of-living and sustainability commitments are front of mind for many, car salary sacrifice is a solution designed to support employees’ financial wellbeing, while helping employers save money and meet their environmental goals.  

Cut costs with car salary sacrifice  

Car salary sacrifice can result in significant savings for organizations. In fact, some Benifex clients have achieved annual savings of £1.4 million.  

For employees, the financial appeal lies in the overall affordability and convenience of the process. There’s no deposit, no credit check, and no balloon payment at the end. Everything is included in a single monthly cost, enabling employees to save through income tax and National Insurance efficiencies.  

Phil highlighted that “the typical saving that you would expect, net National Insurance saving, would be around £925 per year, per electric vehicle taken under the scheme.” 

Tusker has expanded its offering by adding five-year lease options and pre-loved vehicles, both of which help bring down monthly payments for employees. This is particularly impactful for employees on lower incomes or those with limited access to credit.  

Meet your sustainability goals  

But the benefit isn’t just financial. Car salary sacrifice schemes can help companies meet their ESG goals by significantly reducing vehicle emissions through increased adoption of electric and low-emission vehicles.  

In our 2024 research, 96% of HR and Reward leaders said sustainability was an important pillar of employee experience and 65% said they were investing in sustainable initiatives – so this is a clear priority for organizations.  

In fact, Tusker offsets all tailpipe emissions from hybrid and petrol vehicles, and even charging emissions for EVs. This serves the dual purpose of giving employers meaningful data about their emissions output.  

Benifex further supports sustainability efforts with our Trees with Benefits initiative. For every benefit selected through the Benifex Marketplace, a tree is planted in one of our dedicated forests in Nepal and Madagascar – we’re on track to have planted 1 million trees during summer 2025.  

Help employees make the most of car salary sacrifice schemes 

Even the best benefits need visibility and understanding to succeed — getting communications right is essential to ensuring your car salary sacrifice benefit resonates. As Zach Ward mentions, “communications can remove barriers for employees taking a look at or even submitting the benefit.”  

When people know something is available — and valuable — they act. The same is true with salary sacrifice. For instance, a recent email campaign promoting car salary sacrifice drove a 123% increase in benefit views and even lifted overall platform engagement by 26%.  

Benifex supports clients with ready-to-send email templates and targeted communications campaigns to drive engagement and take-up. Employers using multi-car functionality even receive a complimentary Benifex communications campaign to boost employee engagement with the benefit.  

Real-world success stories  

ScottishPower was spotlighted as an award-winning example of the impact that a car salary sacrifice scheme can have – supporting both employees and the business’ Net Zero goals. Since launching their program in June 2022, more than 690 EVs have been ordered through Tusker. So far, the company has saved an estimated 1,192 tons of CO₂ per year, with £2.6 million in projected National Insurance savings.  

From an employee perspective, the benefits are clear. Craig Massey, a Sales Solution Architect with Capita, reflected on his experience getting a car via a vehicle salary sacrifice scheme: “The tax savings that I’m able to make, plus the fact that everything is included and my running costs are significantly lower, meant it was an easy choice for me to make.” 

Thanks to built-in lifestyle protection that allows cars to be returned penalty-free in cases such as resignation, redundancy, or long-term sickness, employees are ensured peace of mind. This helps your team feel secure in their decision to join the scheme while reducing risk for employers.  

Want to learn more about car salary sacrifice?   

For organizations looking to offer their people exciting benefits, car salary sacrifice is a cost-effective, low-admin way to offer employees a high-impact benefit that aligns with both sustainability strategies and financial wellbeing goals. It’s a win-win that boosts employee engagement while helping companies meet their environmental and organizational goals.  

To learn more and hear real-world insights from Benifex and Tusker, watch the full webinar on demand.