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Salary sacrifice for company cars isn't as popular as providers tend to suggest

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Interest levels in salary-sacrifice schemes around company cars are lower than marketplace comments would suggest, according to new research.

Salary-sacrifice schemes are being touted by vehicle providers as the ‘new’ employee benefit for 2010 and beyond, but a survey by fleet operators organisation ACFO reveals 24% of respondents have never looked at the salary-sacrifice option and just over a third (36%) are thinking about looking at salary sacrifice.

A further fifth (22%) have ‘no interest’ in salary-sacrifice schemes and just 17.1% are currently analysing the salary-sacrifice option.

Decision-makers responding to the survey operated fleets ranging in size from under 50 vehicles to more than 1,500. The largest single fleet-size band was the over-500 cars group (46% of the sample). The next largest group (34%) was the sub-100 cars group.

ACFO membership secretary and director Stewart Whyte said: "According to our findings, interest levels in salary-sacrifice schemes appear lower than general market comment seems to suggest. Comments from salary-sacrifice scheme providers suggest there is a great deal of interest in the concept.

"We know that many ACFO members have seen merit in a salary-sacrifice-type arrangement, as an extension to the range of employee benefits on offer. Some have also seen this as a complete alternative to the use of more traditional fleet operating methods. This range is a major feature of the depth of experience across ACFO and the diversity of forms across the membership.

"As a result, most providers will, I’m sure, acknowledge that salary-sacrifice schemes can be an excellent product under specific fleet operating circumstances but cannot be considered as having universal relevance.

"While financial experts and vehicle leasing companies are swift to promote the salary- sacrifice concept it depends on income levels and staff turnover levels. Businesses that employ staff on low or minimum wages and/or have a high employee turnover rate should not entertain the concept."