Salary sacrifice company cars: How to promote a scheme

How employers should promote salary sacrifice car schemes to staff

• Carry out a staff survey before implementing the scheme.
• Work with the leasing provider to run workshops, roadshows, events and presentations, distribute flyers, posters and leaflets.
• Ensure the scheme’s online portal includes comprehensive FAQs, a detailed explanation of legal, tax and financial issues, and an interactive cost calculator.
• Make sure employees fully understand the salary sacrifice contract commitment and the impact it will have on their income.
• Include a mechanism for reviewing take-up regularly.

Plus points to push

• Tax and national insurance savings.
• Flag up car choice, popular brands and green credentials.
• Highlight fixed monthly cost and extras, such as maintenance, servicing and road tax.
• Access to a new car.

Employers need to generate maximum interest in their salary sacrifice car scheme, but must ensure employees fully understand all the ramifications of joining

An employer can have the best planned and structured salary sacrifice car scheme in the world, but if staff do not take it up, it will not be a success.

So promoting, marketing and communicating the scheme before, during and after launch is absolutely vital.

A good first step, ideally well before the point of launch, is to carry out a staff survey to gauge potential interest.

Employers will also need to decide whether to communicate a salary sacrifice car scheme separately or together with any other existing company car scheme.

Beyond the marketing imperative, employers have a duty of care to employees to explain exactly what it is they are signing up and committing themselves to, including: precisely what it will mean in terms of take-home pay; the risks and responsibilities that come with the offer; the financial, legal and tax complexities; and the day-to-day practicalities of being in charge of a company car.

David Hosking, managing director of Tusker, says: “Employees need to understand clearly what they are entering into and what their responsibilities will be. The information needs to be easy to understand and intuitive. It is a good idea to have a lot of frequently-asked questions and help buttons on the online portal. It can also make sense to back up the online information with roadshows.”

Employers also need to decide which of the scheme’s assets they want to promote: tax savings, eco benefits, access to a new car, or all of the above.

A bells-and-whistles launch is not always necessary, but employers must ensure the scheme’s arrival generates as much excitement and interest as possible.

Hosking adds: “It is a good idea to do a lot of activity around the time of the launch, but employers also need to maintain and refresh it. There needs to be ongoing communication about it, perhaps through regular bulletins and updates, or in the staff magazine.”

Promotion and marketing mix

The promotional and marketing mix will normally include leaflets, flyers, email communications, promotions and special offers, information teasers and roadshows. Ian Hughes, commercial director at Zenith, says: “Employers need to generate a buzz and excitement. They want to try to make it go off with a bang. After that, it is about maintaining momentum through regular communications.”

Accountancy firm KPMG allowed its employees to register for its salary sacrifice car scheme before it was officially launched.

Harvey Perkins, partner at KPMG, says: “We found a pre-registration process worked well when we launched our scheme. People were able to pre-register on the website before the launch. It was a good way to build up excitement.”

It is also helpful if employees can access a scheme’s online portal via the organisation’s main benefits and reward website, and it is important for the portal to include an intuitive cost calculator that will show the potential tax savings.

Show all deductions

Karen Lewis, auto solutions consultant at ALD Automotive, says: “It needs to be able to show very clearly all the deductions and all the benefits. That really is a prerequisite. A flyer is all well and good for showing examples, but interactivity is critical because once an employee enters into the scheme, there is no going back.”

This is especially important considering the fact that although the employer is offering access to a new car at a substantial saving, employees need to really understand what sacrificing £200 to £300 a month of their salary will do to their take-home pay.

It is also worth bearing in mind that employees may be motivated to choose cars for reasons other than cost or tax savings. Other attractions include the fixed monthly cost of the car (which is typical of salary sacrifice car schemes) or the fact that maintenance, road tax and servicing will be included as part of the benefit package.

A scheme’s brand choice, specification of cars and environmental credentials are also likely to be talking points among employees.

KPMG’s Perkins adds: “We see cases of employees taking cars that are less tax-efficient, even under the current rules, because they are the cars most appropriate to their circumstances.

“So it is as much about having a car that is riskand maintenance-free and with lower insurance as it is about the tax benefits.”

Finally, it is important to have an evaluation and review mechanism in place to ensure that the salary sacrifice car scheme is being pitched and promoted in the right way, that take-up can be measured and fed back, and therefore whether the scheme needs to evolve or change as the offer is developed and bedded in.

Read more on How to manage salary sacrifice company cars