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  • Mar 25, 2022

  • 13 min read

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How much does a car on salary sacrifice cost compared with a personal lease?

Customers ask us why the total cost of an electric car through salary sacrifice can seem higher than taking out a personal lease. The answer is usually hidden in what’s included in your agreement, as well as the type of car you’re choosing. Are electric cars always more expensive than their petrol or diesel equivalent? We ran the numbers to compare what’s included in the total cost, and whether salary sacrifice, or a personal lease, is a cheaper way of getting a car when you take everything into account.

Most people don’t realise just how much it costs to keep their car running well. Lots of ad hoc running costs add up over time. According to Nimble Fins, the average cost of running a petrol or diesel car in 2022 is £3,000 a year. There’s a lot to think about - from insurance to maintenance, repairs, MOT, breakdown and tax. It’s a financial commitment that needs time and money to manage. That’s why we make it super easy for drivers who use our salary sacrifice scheme by covering everything they need to hit the road in one monthly payment.

How does the monthly cost of a car on salary sacrifice compare to the cost of a personal lease?

Let’s take a comparison of the cost of leasing a Corsa 1.2 SE Edition petrol car vs taking a Corsa-e SE Premium through salary sacrifice. We’re comparing a petrol version of the Corsa with an electric one of a higher spec, because most drivers will expect the EV to be more expensive. We’re about to show you how you can get your hands on an electric car that will cost you less each month than a petrol car.

When we take into account the costs of fuel, insurance, tyres, MOT, servicing and repairs on top of the basic lease price for a personal lease, we can see that getting hold of an electric car equivalent through salary sacrifice works out cheaper. Because our electric car salary sacrifice is one all-inclusive price that covers everything you need to hit the road, this comparison gives drivers savings of nearly £70 per month while letting them switch to a brand new, top-spec electric car.


Here’s how the costs of the two cars stack up against each other.

  • • Monthly cost of the personal lease Corsa 1.2 SE Edition = £399.52
    • Monthly cost of the salary sacrifice Corsa-e SE Premium = £330.08

Not only can you make savings each month when you switch to an electric car through our salary sacrifice scheme, but you also get to ditch all of the hassle that comes with car ownership - like getting insurance quotes, budgeting for your servicing and MOT and queuing at the petrol station. If you need more convincing check out our handy guide on why you should choose electric for your next car.

Getting a car through your employer with our salary sacrifice scheme can save you up to 40% off the price of a brand new EV through Income Tax and National Insurance savings. Find out how.

What’s the comparison based on?

We ran a comparison between two makes of Vauxhall Corsa - a petrol Corsa 1.2 SE Edition, and its electric equivalent, the Corsa-e SE Premium.

The numbers are based on a 40-year-old driver who earns £40,000, lives in South London and drives 8,000 miles a year. We’ve used Nimble Fin’s averages and our own research based on like-for-like services to crunch the numbers for this comparison.

What's the cost of the initial payment on a car lease?

When you lease a new car, you’ll usually make an initial payment at the start of the contract. Your initial deposit can be between 1 - 12 months of the monthly lease cost, so you’re parting with anywhere from a few hundred to a few thousand pounds at the start of the process.

Personal lease: Corsa 1.2 SE Edition initial payment = £389.03 (equivalent to 1 month lease + broker fee of £198.99)

When you get your car through our salary sacrifice scheme there’s no upfront cost. You can keep hold of your cash and pay for your car out of your monthly salary at one standard cost across the period.

Salary sacrifice: Corsa-e SE Premium initial payment = £0

How much does a monthly car lease cost?

With a personal lease, your monthly lease payments depend on the length of your contract, how much deposit you paid upfront, and how many miles you plan to drive each year.

The cost of a personal lease is cheaper at face value than a salary sacrifice car, but that’s because it doesn’t take into account all of the extra running costs that need to be factored in. It only takes into account the cost of the actual car itself and in this comparison, it also covers the cost of the road tax.

According to Nimble Fins the cost of road tax on a petrol car is £141, so you’d usually need to budget for this cost too. Because electric cars produce zero emissions there’s no road tax to pay.

Personal lease: Monthly cost of lease for Corsa 1.2 SE Edition = £190.04

Our salary sacrifice monthly payments include absolutely everything you need to hit the road: car, charger, insurance, servicing, maintenance, breakdown and tyres. The lot. All in one easy monthly payment.

Salary sacrifice: Monthly cost of salary sacrifice for Corsa-e SE Premium = £330.08

Maintenance, Servicing and Repairs

An MOT is a legal requirement that costs around £55 per year. The cost of the MOT isn’t a problem for most drivers, but the cost of repairs that the MOT uncovers can be hefty.

Drivers can get hit with costly bills of hundreds, if not thousands of pounds when something goes wrong with their car. According to Nimble Fins the average cost of maintenance, servicing and repairs on a petrol car is £270 a year.

Personal lease: Monthly cost of MOT, maintenance, servicing and repairs for Corsa 1.2 SE Edition = £22.50

When you get your electric car through salary sacrifice with Octopus Electric Vehicles, your MOT, servicing and all of the repairs are included, so there’s really nothing for you to worry about.

Salary sacrifice: Monthly cost of MOT, maintenance, servicing and repairs for Corsa-e SE Premium = £0

Tyres

Well-maintained tyres keep you safe on the road and make your travel more fuel-efficient, but if they’re not well looked after they can result in your car failing its MOT.

According to Auto Express, 10% of cars that fail their MOT need new tyres. Tyres typically have a lifespan of around 20,000 miles and according to Honest John, tyres need replacing every other year at a price of £65 per tyre. You’ll need to replace all four tyres every 2 years on average.

Personal lease: Monthly cost of tyres for Corsa 1.2 SE Edition = £10.83

Through our salary sacrifice scheme, we’ll cover punctures and sidewall damage. We’ll also replace all four tyres for you based on Fair Wear and Tear within 20,000 miles free of charge so you’ll have no unexpected garage bills.

Salary sacrifice: Monthly cost of tyres for Corsa-e SE Premium = £0

Breakdown cover

Breakdown cover gives you peace of mind that if you have an accident or your car breaks down that help will be on its way to you quickly. A good level of cover will typically include roadside assistance; home recovery; national recovery; parts and repairs; and onward travel.

Personal lease: Monthly cost of breakdown cover for Corsa 1.2 SE Edition = £14.08

With our salary sacrifice package, breakdown is included at no extra cost, so you don’t need to worry about getting your own roadside assistance.

Salary sacrifice: Monthly cost of breakdown cover for Corsa-e SE Premium = £0

Insurance

Insurance is an essential part of keeping your car on the road. Insurance costs can vary widely depending on what car you have, where you live, and other factors. On average UK drivers can expect to pay around £484 per year, according to Nimble Fins.

Personal lease: Monthly cost of insurance for Corsa 1.2 SE Edition = £40.33

With our salary sacrifice scheme, fully comprehensive insurance is normally included in your monthly payment. No need to find a quote or keep on top of annual payments, it’s all taken care of. Some employers choose not to include insurance, but it’s up to your company.

Salary sacrifice: Monthly cost of insurance for Corsa-e SE Premium = £0

How much does fuelling a car cost each month?

If you’re taking out a lease on a petrol or diesel car, you’ll be paying much more in fuel costs than you would if you were leasing an electric car.

According to the Nimble Fins research, the average petrol car driver in the UK spends around £1,272 a year on fuel to get from A to B, at a cost of around 20.1p per mile. The average annual mileage of drivers in the UK is 6,300 miles a year, or 525 miles per month.

Personal lease: Monthly cost of petrol for Corsa 1.2 SE Edition = £105.53

Electric car drivers can take advantage of cheap, 100% renewable energy overnight with the Intelligent Octopus EV tariff from Octopus Energy. Access 6 hours of super off-peak green energy between 11.30pm to 5.30am. Just plug in before you go to bed, and in the morning your car is ready to go when you are.

With our salary sacrifice package, we’ll throw in a free home charger and 5,000 miles worth of free energy when you switch to Intelligent Octopus. If you don't have off-street parking or a driveway, we'll give you 5,000 miles of free public charging credit from Octopus Electric Universe.

Salary sacrifice: Monthly cost of fuel for Corsa-e SE Premium = £10.50

Hassle-free driving

As you can see, our electric car salary sacrifice scheme really does cover everything you need to hit the road. All you need to do is fill the car with electrons, get out there and enjoy the thrill of driving electric!

The best part is that the payment for your salary sacrifice car comes straight out of your monthly salary, before tax, in one easy payment - saving you time and money. Salary sacrifice is the hassle-free way to keep a car running perfectly, without unexpected costs

Our salary sacrifice scheme is the perfect choice if you want to make savings on switching to electric through your salary, and ditch the hassle of car ownership. Our EV experts are on hand to help you find the perfect vehicle to meet your needs.

How does salary sacrifice work?

Salary sacrifice is a way of getting access to a brand new car through your gross salary and saving up to 40%. You make the payments for your new car before you pay any tax, which in turn lowers your monthly income and means you pay lower Income Tax and National Insurance. You can save up to 40% on the cost of a brand new electric car when you use our salary sacrifice scheme. Money that you’d usually never see because it goes straight out of your pay to HMRC will now go directly to paying for your car. Win-win!

How does leasing a car work?

Car leasing is the same as a long term rental. You’ll drive the car over a set period, and return it to the leasing company at the end of the agreement. When you lease a car you’ll put down an upfront deposit, make monthly payments and then either return the car to the leasing company at the end of the contract, or you might have the option to buy the car at the end of the lease.

With most leases, the monthly price only includes the cost of the car. You’ll still have to sort out insurance, servicing, maintenance, MOT, repairs and fuel costs. Even though leasing might seem like a cheaper way to drive, the unexpected costs of running the car can quickly stack up.

When taking out a personal lease, you’re paying for your car from your income or savings after you’ve already paid tax.

Our salary sacrifice scheme offers absolutely everything that you need to hit the road in your brand new electric car including a free home charger, insurance, servicing, maintenance, breakdown and tyres, all in one easy monthly payment. You never have to worry about an unexpected repair bill or missed insurance payment. We’ve got you completely covered.

Joining our salary sacrifice scheme is easy. Find out how.