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0 pointsphysicsguy5d ago0 comments

The biggest seller of EVs here is the salary sacrifice schemes that give a huge discount to high earners, especially those with kids.

Imagine you're on taxable income of £120k and have two chidlren in nursery. Currently you get no help with childcare costs from the government. From my own experience it's ~£6000 subsidy per child.

You can currently take out an EV salary sacrifice scheme for ~£600 per month (pre tax), and that brings your taxable income down by £7200. Put another £13k in pension. Boom, you're now getting £13k in pension p/a, and your car is effectively free, because you get £12k back in childcare subsidies.

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alt2275d ago

But how long until those children are no longer in nursery and you are not subsedised for it? In ~2 years you will no longer have this help, you will be paying through the nose for the outstanding amount on your new car, and your take home will be significantly less each month.

physicsguyOP5d ago

Yeah, but you're still taxed at 72% between £100 and £125k if you have a student loan (as most people in that age bracket will be), so even in that case the hit to your take home isn't that much.

mytailorisrich5d ago

There is no need to go that high in salary (a lucky very small minority). The higher income tax band (40%) kicks in at 50k. Salary sacrifice schemes offer huge savings to many people.

KaiserPro5d ago

true it does kick in at 50k but only for stuff over 50k. so its not a cliff like 100k or if you're at the other end on universal credit.

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vkou5d ago

Yeah, but you'll have a new car.

Obviously if you don't need a new car, it's a really bad financial decision to buy one.

And even if you do, it might be a bad financial decision to buy one.

alistairSH5d ago

Obviously if you don't need a new car, it's a really bad financial decision to buy one.

It's almost always a bad financial decision to buy a new car. The first-year depreciation is unreal.

We just bought a 1 year old Audi Q5 in the US for ~30% discount over new. And with the Audi CPO program, the warranty is just as long as a new model.

traceroute665d ago

> Obviously if you don't need a new car, it's a really bad financial decision to buy one.

I dunno ....

At least two EV manufacturers offer a 7 year warranty on new cars on all parts INCLUDING the battery.

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alt2275d ago

physicsguyOP5d ago

Yeah, but you're still taxed at 72% between £100 and £125k if you have a student loan (as most people in that age bracket will be), so even in that case the hit to your take home isn't that much.

mytailorisrich5d ago

There is no need to go that high in salary (a lucky very small minority). The higher income tax band (40%) kicks in at 50k. Salary sacrifice schemes offer huge savings to many people.

KaiserPro5d ago

true it does kick in at 50k but only for stuff over 50k. so its not a cliff like 100k or if you're at the other end on universal credit.

1 more reply

vkou5d ago

Yeah, but you'll have a new car.

Obviously if you don't need a new car, it's a really bad financial decision to buy one.

And even if you do, it might be a bad financial decision to buy one.

alistairSH5d ago

Obviously if you don't need a new car, it's a really bad financial decision to buy one.

It's almost always a bad financial decision to buy a new car. The first-year depreciation is unreal.

We just bought a 1 year old Audi Q5 in the US for ~30% discount over new. And with the Audi CPO program, the warranty is just as long as a new model.

traceroute665d ago

> Obviously if you don't need a new car, it's a really bad financial decision to buy one.

I dunno ....

At least two EV manufacturers offer a 7 year warranty on new cars on all parts INCLUDING the battery.

1 more reply

j / k navigate · click thread line to collapse