Salary sacrifice remains a valuable tool for electrification and recruitment, but expectations are rising. Sohrob Aslanbeigi of Fleet Operations outlines what will set successful schemes apart in the months ahead.

Are salary sacrifice car schemes still delivering the value employers expect?

The short answer is yes – but the reasons are changing.

The schemes have helped many organisations support electrification while, at the same time, strengthening their employee offering.

But the backdrop is changing. Although Benefit-in-Kind rates for EVs remain low by historical standards, they’re rising year-on-year. All the while, manufacturer discounts and used vehicle values have become less predictable.

As a consequence, more organisations are taking a closer interest in how their schemes perform and whether they remain fit for purpose.

This doesn’t mean they’re losing their value. Far from it. But it does mean the conversation is changing.

Over the coming months, the schemes that prove most successful will be those that manage to keep costs under control and continue to represent good value.

The focus is shifting

In the early years of salary sacrifice, the case was relatively easy to make. Ultra-low BiK rates helped keep monthly costs attractive and employee uptake grew quickly. Success, for many employers, was measured by how many people signed up.

Today, high participation rates are still important, especially for employers linking salary sacrifice to sustainability goals and recruitment, but it is no longer enough on its own.

The focus is shifting towards the longer term, with employers asking whether schemes will remain affordable for new joiners, whether costs can be kept competitive over time and whether they will continue to make financial sense over the next two or three years.

As incentives gradually diminish, employers are increasingly treating salary sacrifice as a benefit that needs careful long-term management, particularly with employees making a financial commitment over several years.

Why monthly costs matter more now

Monthly affordability is now under greater scrutiny, with rising BiK rates making schemes more sensitive to pricing changes.

Even relatively small increases can make a difference to take-home pay, and this is prompting tough questions.

Finance teams want to know that if leasing or replacement costs rise, the impact on pricing will be proportionate and easy to explain, while HR teams want reassurance that the scheme still feels fair and accessible.

Scheme design is becoming more important

Differences between funders can be significant, with no single lender consistently offering the best rates across every make and model. Because pricing and funding directly affect monthly costs, schemes that rely on just one funding route can be more vulnerable to market changes.

Conversely, comparing prices more widely can help keep monthly costs lower.

For employers, the key question is whether they can see how the monthly costs are set and how easily they can be reviewed.

Governance matters

As salary sacrifice becomes more established, more stakeholders are likely to show an interest, from finance and HR to procurement and fleet. This inevitably leads to greater scrutiny.

The day-to-day running of the scheme can still be straightforward however, especially if the provider takes care of the operational side.

Where employers do need to stay close to the scheme is at a more strategic level. Employees can quickly lose trust if costs change without warning or if they feel key details were unclear from the get-go.

What employers should be aiming for

As the easy wins of the early EV years fade, salary sacrifice is becoming more demanding, with a greater need for cost control and transparency.

This is not a reason to step back though. Well-run schemes still have an important role to play in supporting electrification and improving what employers can offer their staff.

In the months ahead, the schemes that stand up best will ultimately be those that help employers see how costs are being managed and whether pricing remains competitive.