Electric car leasing: How much will you save by switching your fleet?
Philip Kehoe, Divisional Director of leasing.cars – part of the DSG Finance Group – is committed to sharing just how much businesses can save by switching their company cars from regular petrol and diesel to the latest full battery electric or Plug-in hybrid models.
He said: “Over the last 10 years, we have seen encouraging growth in the sale of battery electric vehicles, however in the last two years, this growth has been exponential, in fact in September 2022, the UK registered its millionth electric car, this growth will only continue.”
What is behind this exponential growth?
If we look at the SME Fleet sector in particular, there are three areas that support the massive growth in electric vehicle sales, these are:
The first savings available are the running cost of electricity vs diesel, even with the recent increases in energy costs, running an electric car vs a diesel would offer savings for a business. Then there are the tax savings – these are often overlooked, but by running an electric car, a company can offset 100% of the contract hire rental against their corporation tax liability (rather than 85% for a typical diesel).
Finally, the big tax saving is the Class 1 National Insurance cost that is payable on the employees’ BIK (Benefit in kind), currently set at 13.25%. For example, on a £38,620 Audi A4, this could cost a business in excess of £5,000 over three years.
All new cars that have a zero tailpipe emission currently attract the lowest amount of BIK – this is only 2% of the P11d value, as a comparison, the Audi A4 is 32%. The Government recently showed their commitment to electric cars in the 2022 Autumn Statement by keeping the BIK amount to 2% until 2025, then 2025/26 – 3%, 2026/27 – 4% and 2027/28 – 5%.
So we have real long term savings for both businesses and employees. So, if you want to leave your employees with more of the money you pay them each month, let them drive electric. The same Audi A4 that just saved your company excess of £5,000, could save your employee £23,000 over the same three year period. This is a substantial bonus and will be well received by your staff at a time when they might be facing cost of living increases. The added bonus of an electric car is that if you choose to offer free private mileage, this is tax free, the employee will pay no BIK.
The Government has set out policies and proposals for decarbonising all sectors of the UK economy and the target is to be net zero by 2050. Many UK businesses are already on board with their own Environmental, Social and Governance strategy (ESG) to become a carbon neutral operation. By switching your fleet to electric vehicles, you can quickly reduce your CO2 footprint. For example, our Audi A4 – over the three years travelling 20,000 miles per annum – will produce 13 Tonnes of CO2. You would need to plant 78 trees to offset the CO2 of that one car.
You can view all of the above savings and more by using the leasing.cars [Fleet Savings Calculator] and while you are there, why not download your free detailed report.
Why talk to leasing.cars?
So, you can see that there are lots of savings available, now let’s say you have a 64 car fleet like DSG Group, the savings just became serious.
This is exactly what happened at DSG Finance Group and it was the driving force for the business to create their market leading Fleet Savings Calculator. After becoming experts at switching and running their own electric car fleet, they wanted to help others see just how much they could save.
The calculator allows businesses to quickly visualise all of the above savings using market-leading, real time contract hire rates, and combining them with specific details about their fleet. For example, you can adjust the annual mileage, amount of vehicles on fleet and the individual driver tax positions. The best part is, you can even claim a free detailed report showing all of these savings.
Richard Hoggart, CEO of DSG Group commented on their own journey: “At DSG Group our transition to a zero carbon fully electric fleet started in 2017 when we took delivery of our first Tesla. It quickly became clear that transitioning our entire fleet to fully electric cars was going to deliver huge benefits. The process then took time, as we began to understand the huge economic benefit in terms of both company tax and fuel advantages and of course the taxation advantages for the driver.”
You can read their full story here to find out more.
In addition to their full electric car fleet, DSG Group have just installed 572 solar panels on the roofs of our Stockport head office, this will generate up to 100kWh of sustainable energy at peak times, hopefully they will have some left to charge the fleet.
So, if you want to talk to ‘The business leasing experts for 0-50g/km vehicles’, then the team at leasing.cars are here for you. They have been offering business contract hire and leasing products since 2003 so they know a thing or two. Not only do they have access to a well suited panel of finance providers, they also have extensive relationships with the vehicle supply market to ensure you get the right vehicle at a competitive price. All of this whilst delivering a Five Star level of customer service.
If you would like to discuss your fleet requirements to see how switching to an electric fleet can work for you, contact leasing.cars on 0161-406 3936 to arrange an appointment.
Or if you are just looking to see what special offers they have available, their website displays a selection of the highest value cars available with the lowest rentals, have a look here.