Alphabet aims to become salary sacrifice leader
20 May 2010
Mark Sinclair is boss of leasing firm Alphabet
Alphabet is hoping to become a leader in the salary sacrifice market with a push on its Motivational Leasing product, at a time when many other major leasing companies hold back on new investment.
"We are a top 10 leasing company, and I would see us higher than that with salary sacrifice," Alphabet director Mark Sinclair told BusinessCar. "At the moment there are not many truly active in the marketplace - some of the larger players are not getting into customer acquisition mode so they're not going to be producing a system."
Sinclair said it is a credit to the ability of smaller firms to move quickly that means they are currently at the forefront. "The smaller players are driving this. Tusker were first and Zenith are most aggressive," he said. "We had a system last year but it's a slow-burn. Lots of people are going through it now, so later in the year and into the next we'll see launches."
Salary sacrifice schemes involve non-company car-eligible employees being able to forego part of their salary, pre-tax, in exchange for a lease car. They have to pay benefit-in-kind tax on the vehicle, and the firm pays national insurance, but the employee gets the benefit of bulk discounts that mean it's a significantly cheaper way of running a car.
Alphabet claims an employee running a £17,000 car with emissions below 121g/km would save £114 per month compared to a PCP finance package on the same vehicle, while employers would make a £20 per month saving through paying less national insurance on the car benefit than they would on the salary. "A lot of people can't even get a decent used car and this puts a new one within reach so long as they can afford the money from the salary," said Sinclair. "And an older used car can be at least as expensive to run with servicing and maintenance; with a new one there's no risk and everything's included."
Sinclair predicted around 5-10% of eligible employees will take up the offer of a salary sacrifice car.
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