The Electric Car Scheme has introduced new industry-first cover that allows drivers to exit their lease without penalty after a major change in personal circumstances.

The new protection covers many unexpected life situations that have never been included in any salary sacrifice contract before, the firm says. These include situations such as a partner’s redundancy, partner’s family-friendly leave, partner’s long-term sickness, or partner’s dismissal, an involuntary salary reduction of 20% or more, a divorce, or an intra-company transfer abroad.

Previously, employees were liable for early termination costs of up to 50% of remaining rentals when any of these events struck.

The change removes a long-standing risk that has held back salary sacrifice uptake, with implications for fleet and EV adoption more broadly.

The Electric Car Scheme investigated how it could make EVs more accessible with a more encompassing salary sacrifice offering that tackles rising redundancies in the UK, plus more than 100,000 divorces in England and Wales (2023) and divorcee incomes falling by 31%.

Employees who resign within the first three months of their agreement will also pay a capped amount, rather than fees that could otherwise run into tens of thousands of pounds. These protections sit on top of Complete Employer Protection, included as standard on every Electric Car Scheme agreement since launch, which covers employers against the full cost of early termination if an employee leaves for any reason, and which no other UK provider matches.

Thom Groot, CEO of The Electric Car Scheme, said the company was rewriting EV salary sacrifice “for life’s curveballs”.

“Until today, an employee going through a divorce or losing a partner’s income could find themselves locked into a car lease they could no longer afford, which was a problem with salary sacrifice as a benefit, not just with our scheme. We’ve fixed it for our customers.”

Salary sacrifice already saves drivers 20% to 50% on the cost of an EV through income tax and National Insurance savings.

Groot said that sal-sac financial protection has now caught up with those tax benefits, with cover for the major life events that could otherwise have left drivers exposed.

“Salary sacrifice has to work for employees across the full range of life circumstances, not just a tidy subset of them, and today’s changes are part of what we’re building towards.”

The changes take effect immediately and are included by the company as standard on every new agreement at no additional cost to employers.