Guide - EZOO

What Are Hybrid Electric Vehicles?

With the UK government phasing out new petrol and diesel cars by 2035 and businesses increasingly focused on sustainability, hybrid electric vehicles (HEVs) have entered the spotlight.

Hybrid vehicles offer a stepping stone between traditional combustion engines and fully electric vehicles (EVs) – but what exactly are they?

This guide will explain everything you need to know about hybrid electric vehicles, including how they work, the different types, tax implications, and whether they make sense for your business.

What Is a Hybrid Electric Vehicle?

A hybrid electric vehicle combines a petrol (or diesel) engine with an electric motor and a battery.

Unlike fully electric cars (which rely entirely on electricity), hybrids use both systems to power the car- sometimes separately, sometimes in tandem.

The key idea? Better fuel efficiency and lower emissions than standard combustion vehicles, without relying solely on charging infrastructure.

Types of Hybrid Vehicles

Mild Hybrid Electric Vehicle (MHEV): Small battery assists engine – can’t drive in electric-only mode. Charges automatically via driving. Example: Ford Puma Hybrid.
Full Hybrid Electric Vehicle (FHEV): Can drive short distances on electric power, switches between engine, electric, or both. Self-charging. Example: Toyota Yaris Hybrid.
Plug-In Hybrid Electric Vehicle (PHEV): Larger battery allows 20–40 mile electric-only range and requires external charging. Offers the best mix for electric suburb driving and long motorway trips. Example: Volvo XC60 Recharge.

How Do Hybrids Work?

Their operation varies by type but generally:

Low speeds or idle = electric motor alone
High speeds = engine engaged
Regenerative braking helps recharge the battery
PHEVs plugged in for full electric range

This dual system reduces fuel use and emissions, especially in urban and stop-start driving.

How They Perform in the Real World

While hybrids promise a balance between electric efficiency and traditional convenience, real-world results depend heavily on driving habits and usage:

Urban driving: Hybrids shine here. Frequent braking and low speeds favour electric power and regenerative braking, improving efficiency.
Motorway driving: The combustion engine does most of the work, especially in mild and full hybrids, reducing the fuel-saving advantage.
Plug-in hybrids: These are only cost-effective if regularly charged. Drivers who skip charging often see fuel economy drop below manufacturer claims.

Servicing and Maintenance Costs

Hybrids generally require less frequent maintenance than traditional petrol or diesel cars, especially if driving involves a lot of electric-only miles. Benefits include:

Reduced brake wear due to regenerative braking
Less wear and tear on the engine
Fewer oil changes (especially in PHEVs and FHEVs)

However, repairs can be more complex and costly when issues do arise – especially if specialist parts or high-voltage battery diagnostics are needed. That makes warranty coverage and bundled servicing especially valuable for business users.

Are Hybrids Considered Electric Vehicles?

They’re electrified, but not fully electric. Only BEVs (battery electric vehicles) run entirely on electric power. Hybrids still use fossil fuels and fall into different tax and regulatory brackets. PHEVs may receive some low-emission incentives, but BiK tax rates are higher than for BEVs.

Future-Proofing: Resale and Legislation Risks

Looking ahead, hybrids may face tighter scrutiny:

The 2035 ban on petrol and diesel includes most hybrids, unless they can travel a “significant” distance with zero emissions
PHEVs that don’t deliver in real-world testing may face tax penalties or lose incentives
As BEV adoption grows, hybrid resale values may drop, particularly for low-range models

Fleet managers and HR leaders should weigh these factors when planning vehicle policy. While hybrids may serve a purpose now, the future is electric – and businesses that lead the transition will benefit most.

Updated BiK Rates for 2025/26

Here’s how HMRC treats company car benefit-in-kind (BiK) for the 2025/26 tax year:

Vehicle Type	CO₂ Emissions	Electric Range	BiK Rate 2025/26
BEV	0 g/km	N/A	3%
PHEV	1–50 g/km	>130 miles	3%
PHEV	1–50 g/km	70–129 miles	6%
PHEV	1–50 g/km	40–69 miles	9%
PHEV	1–50 g/km	30–39 miles	13%
PHEV	1–50 g/km	<30 miles	15%
Petrol/Diesel	51‑… g/km	–	16–37% depending on CO₂

BiK for fully electric cars will gradually increase to 5% by 2027/28.

Hybrid Cars and Salary Sacrifice

Many salary sacrifice schemes still include hybrid vehicles, but EVs offer the biggest savings, making hybrids less attractive financially. Fully electric remains the favoured choice for salary sacrifice and electric car lease deals with EZOO offerings.

Hybrids offer a transitionary option – lower emissions than petrol/diesel but not as cost-efficient or green as EVs. For maximum tax savings, emission reduction, and simplicity, fully electric is the superior choice.

UK Electric Car Grant 2025 Update – 13 More Models Added

UK Electric Car Grant 2025 - 13 more models added

Great news for drivers across the UK! From Saturday 9 August 2025, thirteen additional electric models from Nissan, Renault, and Vauxhall qualify for a £1,500 discount under the expanded UK electric car grant scheme – bringing the total to 17 eligible models this week alone.

What’s New in the UK Electric Car Grant?

Newly eligible models for the £1,500 discount include:

Renault: Alpine A290, Megane, R4, R5 and Scenic
Nissan: Micra, Ariya (from 13 August), plus the new Sunderland-built Leaf
Vauxhall: Corsa Electric, Combo Life Electric, Astra Electric, Mokka Electric, Frontera Electric, Grandland Electric

These join the Citroën ë-C3, ë-C4, ë-C5, and ë-Berlingo, announced earlier this week.

The grant is only available on new EVs, as opposed to used.

What Does it Mean?

It’s now cheaper than ever to go electric.
Instant savings, applied at the dealership. No paperwork needed.
More choice, especially in affordable models under £37,000.
Part of a long-term scheme – running until at least 2029 with over £650 million funding.

How EZOO Makes the Grant Go Further

We don’t just tell you about the UK electric car grant – we help you get the most out of it:

Apply it instantly when business leasing or through salary sacrifice – no extra paperwork, we apply it instantly.
Stack your savings: our all-inclusive packages mean your grant stretches even further.
Zero admin. we handle the details; you just drive.
Stay ahead: we’ll alert you as soon as new models become eligible.

Why Act Now

The UK electric car grant is a key driver in making EVs more affordable than ever. Pair that with the UK’s rapidly growing charging network (over 82,000 public charge points) and the upcoming petrol/ diesel regulation changes in 2030 this is the perfect time to switch.

With the 13 new models added, there’s now an option for almost every lifestyle, from city hatchbacks to family SUVs. The £1,500 saving stacks with EZOO’s salary sacrifice scheme, unlocking up to 60% off your monthly cost. The discount is applied instantly, charging infrastructure is stronger than ever (with 10% off through OVO when you’re an EZOO customer), and funding is secured until at least 2029. Acting now locks in the savings and gets you behind the wheel of a future-ready EV.

Frequently Asked Questions About the UK Electric Car Grant

What is the UK electric car grant?

The UK electric car grant is a government-backed scheme that reduces the cost of eligible new electric cars by up to £1,500, applied instantly at the dealership.

Which electric cars are eligible for the grant in 2025?

As of August 2025, 17 models qualify, including selected Citroën, Renault, Alpine, Nissan, and Vauxhall EVs. The full list is regularly updated by the government.

Who can apply for the UK electric car grant?

Anyone buying or leasing a new eligible electric car under £37,000 can benefit. The discount is applied automatically, so there’s no need to apply yourself.

Can I use the grant with salary sacrifice?

Yes! When you get your EV through EZOO’s salary sacrifice scheme, the UK electric car grant reduces your monthly cost even further – on top of your tax savings.

How long will the UK electric car grant be available?

The scheme is funded until at least the 2028–29 financial year, but the government can make changes at any time. That’s why it’s worth acting now to lock in the savings.

Does the UK electric car grant cover home charging?

No – the grant only applies to the cost of the car itself. But EZOO can help arrange a home charger installation as part of your EV package.

Can I get the full £3,750 grant now?

Currently, most newly eligible models qualify for £1,500. Some may become eligible for the full £3,750 in future, depending on government updates.

Is a Salary Sacrifice Car a Company Car?

With the growing popularity of electric car salary sacrifice schemes across the UK, many employers and employees are asking a simple but important question: Is a salary sacrifice car a company car?

The answer isn’t quite black and white.

While a salary sacrifice car shares some characteristics with a traditional company car, there are key differences in how it’s taxed, who has access to it, and how it’s treated under employment and benefit-in-kind rules.

What Is a Company Car?

A traditional company car is a vehicle provided by an employer for business and sometimes personal use. The employer usually pays for the vehicle, fuel, servicing, insurance, and sometimes even charging (in the case of EVs).

Company cars remain a company-owned asset and are treated as a benefit-in-kind (BiK) if the employee uses them for personal journeys, including commuting.

What does BiK mean?

The BiK value determines how much the employee pays in tax for the benefit of having access to the car. Petrol and diesel vehicles are taxed at much higher BiK rates than electric vehicles – making EVs significantly more attractive for both employer and employee.

What Is a Salary Sacrifice Car?

A salary sacrifice car is an electric vehicle offered to employees through a salary sacrifice scheme with their employer. The employee agrees to give up a portion of their gross salary (before tax and National Insurance) in exchange for the use of a fully maintained, insured, EV.

The key here is that the employee doesn’t own the vehicle – but nor does the employer in the traditional sense. Instead, the employer leases the car, and the employee accesses the vehicle via the salary sacrifice arrangement.

It’s essentially a “company car in disguise” – with some unique advantages.

So, Is It a Company Car? Technically, Yes – But Functionally Different

From HMRC’s perspective, a salary sacrifice car is treated as a company car for tax purposes, because:

The employer provides the car (via a lease)
It’s offered as part of the employee’s remuneration package
The employee gets personal use of the vehicle (including commuting)

However, the key difference is who pays. Instead of the employer covering the cost as an additional benefit, the employee funds it through salary exchange, unlocking big tax advantages in the process.

Tax Treatment of Salary Sacrifice Cars

Here’s a breakdown of how salary sacrifice vehicles are treated for tax:

Benefit-in-Kind Tax: The employee pays BiK tax on the vehicle’s value. Since EVs are rated at just 3%, this is minimal.
Income Tax and National Insurance Savings: Because the lease cost is deducted from gross salary, employees pay less income tax and National Insurance.
Employer NI Savings: Employers also save on National Insurance Contributions because the employee’s taxable salary is lower.

Overall, it’s a tax-efficient, low-cost way to drive a new car – cheaper than a personal lease or outright purchase.

Ownership and Responsibility

One of the most important differences between a traditional company car and a salary sacrifice car is how much control the employee has. With salary sacrifice schemes:

The employee chooses the car – make, model, colour, extras, and mileage cap
The vehicle is leased in the employer’s name but used exclusively by the employee
All costs are bundled: insurance, servicing, maintenance, tyres, MOT, breakdown cover, and road tax
At the end of the agreement, the car is returned to the provider.

In traditional company car schemes, the company usually assigns a vehicle for business needs, with fewer personalisation options and potentially more business-related mileage expectations.

What Happens If the Employee Leaves or Goes on Maternity/Paternity Leave?

Good providers include protections for unexpected life events. This might include:

Early termination cover for redundancy or resignation
Options to pause or defer payments during parental leave
Flexibility to transfer the agreement to another employee where appropriate

This is another way salary sacrifice schemes differ from rigid company car programs – they’re designed to support employees’ changing circumstances.

Is Salary Sacrifice Worth It for Employers?

Absolutely. Offering EV salary sacrifice cars is a powerful employee benefit that doesn’t cost the company money (and might even save on NI). It’s great for:

Attracting and retaining talent
Supporting green fleet policies and ESG goals
Offering a “perk” without increasing payroll spend
Reducing scope 1 and scope 3 emissions

Better yet, when partnered with a provider like EZOO, all the admin – insurance, tax, contracts, and car handover – is handled on your behalf. No stress, no hassle.

You can learn more about salary sacrifice for employers here.

Key Differences Between a Salary Sacrifice Car and a Traditional Company Car

Feature	Salary Sacrifice Car	Traditional Company Car
Tax Treatment	BiK applies	BiK applies
Who Pays?	Employee via gross salary	Employer
Vehicle Choice	Employee chooses	Often employer decides
Ownership	Leased via employer	Owned/leased by employer
Personal Use	Allowed	Allowed (but sometimes limited)
Insurance & Servicing	Included	Usually covered by employer
Cost to Employee	Tax-efficient, low monthly cost	Higher BiK (especially for petrol/diesel)

Enjoy a Simpler Way to Reward Your Team

So, is a salary sacrifice car a company car? Technically yes – but with a twist. It falls under the definition of a company car for tax purposes, but functionally feels like a personal lease with all the benefits of company car simplicity and zero ownership hassle.

With EZOO, salary sacrifice isn’t just a way to drive electric – it’s a smarter, simpler, greener way to reward your team.

Frequently Asked Questions

Is a salary sacrifice car classed as a company car for tax purposes?

Yes. HMRC treats salary sacrifice cars as company cars. Employees pay benefit-in-kind tax – though it’s incredibly low for EVs.

Who owns a salary sacrifice car?

The car is leased by the employer from a provider. The employee has exclusive use during the agreement but doesn’t own the vehicle.

Can employees use a salary sacrifice car for personal use?

Yes, absolutely. Salary sacrifice cars are designed for personal use, including commuting.

Do salary sacrifice cars affect mortgage applications?

Potentially. Since it reduces gross salary, lenders may view it as a financial commitment. However, it’s often treated like any other deduction.

Is maintenance and insurance included in a salary sacrifice scheme?

Yes. With providers like EZOO, the monthly fee includes insurance, maintenance, servicing, breakdown cover, tyres, and road tax – all bundled for ease.

Does Business Car Leasing Include Insurance?

When it comes to business car leasing, the fine print can make all the difference.

One of the most common (and critical) questions we get is: “Does business car leasing include insurance?” The answer? It depends on the provider and the type of lease.

Some business car leases come as “fully comprehensive,” while others leave insurance entirely in your hands.

What Is Business Car Leasing?

Business car leasing allows a company to access vehicles – often EVs – for a fixed term, usually 2 to 4 years, with predictable monthly payments. There are a few leasing models on the market:

1. Traditional Business Contract Hire (BCH)

Long-term lease (usually 2–4 years)
Fixed monthly cost
Mileage limits
Insurance usually not included

2. Business Car Subscription Services

Month-to-month or short-term commitment
All-in-one packages
Includes servicing, maintenance, roadside assistance – and often insurance

3. Electric Car Salary Sacrifice Schemes

Employee leases an EV via gross salary deductions
Employer contracts with a provider
Typically includes insurance, maintenance, breakdown cover, tyres, and more

Traditional Business Car Leasing: Is Insurance Included?

In most Business Contract Hire (BCH) arrangements, the leasing provider supplies the vehicle – but insurance is your business’s responsibility. This means:

You must arrange either a fleet insurance policy or name individual drivers on personal policies
You’re liable for ensuring all vehicles are road legal
You may be restricted in terms of which insurers are acceptable to the lease company
You must ensure cover is continuous for the duration of the lease

This setup works for some companies—especially those with existing fleet policies – but it also adds admin, risk, and cost.

EV Subscriptions and Salary Sacrifice: A Different Story

Now let’s talk about more modern, flexible EV leasing options, like those offered here at EZOO.

EV Salary Sacrifice Schemes

These schemes are becoming hugely popular with forward-thinking businesses. They allow employees to drive an electric car in exchange for a portion of their gross salary. And the good news?

Fully comprehensive insurance
Coverage for the employee and often their partner or named driver
No need for the employee to organise or pay for a personal policy
Insurance is maintained throughout the lease term

This makes salary sacrifice schemes incredibly appealing for both HR and employees – no surprises, no admin, and peace of mind.

Business EV Subscriptions

Think of these as Netflix for cars. Business EV subscriptions are:

Flexible (monthly rolling contracts or short-term options)
All-inclusive
Tailored for agile businesses and short-term projects

Insurance is usually baked into the monthly fee, along with servicing, tyres, maintenance, and breakdown. Subscriptions are ideal for companies that need vehicles quickly, without long-term commitment or red tape.

What Are The Advantages of Business Car Leasing With Insurance?

Let’s weigh up whether going for an all-in-one package with insurance included is the right choice.

Simplicity: One monthly payment, everything covered.
No Admin: No policy comparisons, renewals, or insurance paperwork.
Predictable Budgeting: Easier to forecast vehicle running costs.
Great for Employees: Especially with salary sacrifice, employees don’t need to think about insurance at all.
Risk Mitigation: Cover is guaranteed and designed for leased EVs.

Questions To Ask Your Provider About Insurance

Before you commit to a lease or subscription, ask these questions:

Is fully comprehensive insurance included?
Does the insurance cover multiple drivers or just one?
Are there any driver restrictions (e.g. age or licence type)?
What’s the excess in the event of a claim?
Is breakdown cover and roadside assistance included?
Can we opt out of the insurance if we already have a fleet policy?

Clarity up front will save headaches later.

Build Your Fleet With Peace Of Mind

So, does business car leasing include insurance? Sometimes yes, sometimes no—it all depends on the model. Traditional business leases typically exclude it, while modern solutions like EV subscriptions and salary sacrifice schemes usually include comprehensive cover.

If your business values simplicity, compliance, and low admin, choosing a package that includes insurance is a smart move. Especially with electric vehicles, where incentives, cost savings, and ease of use make bundled options a compelling choice.

Frequently Asked Questions

Does business car leasing always include insurance?

No. Traditional business contract hire usually doesn’t include insurance. However, salary sacrifice schemes and EV subscriptions typically do.

What kind of insurance is included with EV salary sacrifice?

Most schemes offer fully comprehensive insurance, often including cover for the employee, their partner, and named drivers. Breakdown and roadside assistance are usually included too.

Can I provide my own insurance for a leased business car?

In traditional leasing models, yes. In subscription and salary sacrifice models, insurance is usually bundled and not optional.

Is business car insurance more expensive?

Not necessarily. Insurers often offer favourable fleet or business rates, but individual driver history, vehicle type, and location still affect premiums.

Electric Car Grant: Are EVs More Affordable Than Ever?

The UK government has just launched an exciting new initiative that could revolutionise electric vehicle ownership for thousands of drivers. The Electric Car Grant, backed by a substantial £650 million funding package, represents the government’s strongest commitment yet to accelerating the transition to zero-emission vehicles.

What Is the Electric Car Grant?

The Electric Car Grant is a comprehensive financial incentive scheme designed to make electric vehicles more accessible to everyday drivers.

The grant offers discounts of either £1,500 or £3,750 on new zero-emission cars priced at or under £37,000, instantly making electric driving more affordable for a broader range of consumers.

This isn’t just about upfront savings either. The grant unlocks potential additional savings of up to £1,500 annually in running costs compared to traditional petrol or diesel vehicles, making the total cost of ownership significantly more attractive.

How Does the Grant Work?

The scheme operates on a two-tier system based on environmental sustainability standards:

Band One (£3,750 discount): Reserved for the most sustainably produced vehicles that meet the highest environmental criteria.
Band Two (£1,500 discount): Available for vehicles that meet basic environmental standards.

How Do Vehicles Qualify?

The key requirement is that manufacturers must hold verified Science-Based Targets for carbon emissions reduction. This ensures that the grant supports not just zero-emission driving, but also sustainable manufacturing practices throughout the vehicle’s lifecycle.

To qualify, vehicles must meet several criteria including:

Zero tailpipe emissions
Minimum 100-mile WLTP range
Battery warranty covering at least 70% usable capacity for eight years or 100,000 miles
List price of £37,000 or less

When Is The Grant Available?

The grant became available from July 16, 2025, with funding secured through to the 2028-2029 financial year. Car manufacturers can now apply for vehicle eligibility, and once approved, they’ll automatically apply the discount to qualifying vehicles – meaning no additional paperwork for customers.

Top Electric Vehicle Picks Under £37k

With 50 electric vehicles from 27 brands currently priced under the £37,000 threshold, there’s never been more choice for grant-eligible EVs. Here are some standout options that could become even more compelling with the grant:

Renault 5 – £22,995 (Potentially £19,245 with Band One grant)

The Renault 5 combines retro charm with cutting-edge technology. This stylish five-door hatchback offers up to 250 miles of range in higher specifications, making it perfect for both city driving and longer journeys. Even the base model includes LED lighting, climate control, and cruise control.

Citroen E-C3 – £22,095 (Potentially £18,345 with Band One grant)

This compact crossover delivers exceptional comfort thanks to its Advanced Comfort seats and suspension system. With up to 199 miles of range from its 44kWh battery, it’s ideal for drivers wanting crossover practicality without the premium price tag.

Kia EV3 – £33,005 (Potentially £29,255 with Band One grant)

Kia’s smallest SUV punches well above its weight in terms of space and refinement. The EV3 offers impressive range options, with the larger battery delivering up to 376 miles – perfect for drivers who want to eliminate range anxiety entirely.

Vauxhall Grandland – £36,455 (Potentially £32,705 with Band One grant)

For families needing maximum space, the Grandland offers a proper family-sized SUV experience at a competitive price. With over 300 miles of range and generous interior space, it proves that electric family cars don’t have to break the bank.

Dacia Spring – £14,995 (Potentially £11,245 with Band One grant)

As one of the most affordable electric vehicles on the market, the Spring could become an absolute bargain with the grant applied. It’s perfect for urban driving and represents an incredibly accessible entry point into electric motoring.

Why This Grant Matters for Your EV Journey

The Electric Car Grant addresses one of the biggest barriers to EV adoption: upfront cost. Combined with the inherent savings from reduced fuel and maintenance costs, electric vehicles are becoming increasingly attractive propositions for both personal and business use.

For those considering EV salary sacrifice schemes or leasing subscriptions, the grant makes the financial case even more compelling. Lower purchase prices mean reduced monthly payments, while the long-term savings continue to accumulate through reduced running costs.

The Future Is Electric

This grant represents more than just a financial incentive – it’s a clear signal of the government’s commitment to supporting the electric vehicle transition. With charging infrastructure investment also announced alongside the grant, the foundations are being laid for a comprehensive electric vehicle ecosystem.

The scheme’s focus on sustainability standards also ensures that as more drivers make the switch to electric, they’re choosing vehicles produced with environmental responsibility at their core. This holistic approach to the EV transition benefits not just individual drivers, but the broader goal of reducing transport emissions.

As more manufacturers adjust their pricing and new models enter the market, the range of grant-eligible vehicles is likely to expand further, giving consumers even more choice in their electric vehicle journey.

The Electric Car Grant isn’t just changing the economics of electric vehicle ownership – it’s accelerating the future of sustainable transportation for everyone.

Business Car Leasing or Buying: Which Is Better?

When it comes to acquiring vehicles for your business, deciding between leasing and buying is a critical financial and operational decision.

With the rise of electric vehicles (EVs) and increasingly generous government incentives, businesses now have more options than ever before.

In this guide, we’ll break down the pros and cons of leasing vs buying business cars and explore which might be right for your organisation.

What’s the Difference Between Leasing and Buying?

Leasing involves renting a vehicle from a provider for a set term (usually 2–4 years), paying fixed monthly fees, and returning the vehicle at the end of the agreement. You never own the vehicle, but you also avoid long-term depreciation and resale worries.

Buying (either outright or via finance) means your business owns the vehicle. You can use it as long as you like, modify it, and sell it later – but you’re responsible for maintenance, depreciation, and disposal.

Advantages of Business Car Leasing

The increasing popularity of electric vehicles, particularly among environmentally conscious companies, has made leasing more attractive.

1. Tax Efficiency

Business car leasing can be highly tax-efficient. For example:

Lease payments may be fully deductible as a business expense.
Electric vehicles enjoy 3% BiK tax, which makes them much cheaper for employees.
There’s no road tax (VED) for EVs and reduced or zero charges for Clean Air Zones.

2. Cash Flow Benefits

Leasing avoids the large upfront cost of buying a vehicle. You only pay an initial rental (usually 1–3 months of payments) and manageable monthly fees, freeing up capital for other business needs.

3. Predictable Costs

With leasing, your costs are fixed and predictable. Many agreements include servicing, maintenance, and breakdown cover – ideal for budgeting.

4. Latest Technology

Leasing allows your business to refresh its vehicle fleet every few years, keeping up with the latest EV tech, range improvements, and safety features.

5. No Depreciation Risk

EVs depreciate quickly due to rapid tech changes. Leasing transfers this risk to the provider, so you’re not left holding a car worth far less than you paid.

Disadvantages of Leasing

1. Mileage Limits

Most leases include annual mileage restrictions. Going over can mean additional charges.

2. No Asset Ownership

You don’t build any equity with leasing. Once the term ends, you return the vehicle with nothing to show for the payments made.

3. Early Termination Fees

Ending a lease early can be expensive. Flexibility is limited compared to owning a car you can sell or keep as needed.

Advantages of Buying a Business Car

1. Asset Ownership

The vehicle is an asset on your balance sheet. You can sell it whenever you choose and potentially recover some of the cost.

2. No Usage Restrictions

There are no mileage limits or return condition clauses. You can use the vehicle as needed and customise it to fit your branding.

3. Better for Long-Term Use

If you plan to keep a vehicle for many years, buying may be more cost-effective in the long run – especially if you’re not concerned about depreciation.

Disadvantages of Buying

1. High Upfront Costs

Buying outright requires significant capital. Even with finance, you’ll likely need a deposit and face higher monthly payments than leasing.

2. Depreciation

Electric cars, in particular, can lose value rapidly due to battery improvements and evolving regulations. You’re exposed to this financial risk if you own the vehicle.

3. Maintenance and Repair Costs

Once the warranty expires, repair and maintenance costs fall entirely on your business – unlike with most lease agreements.

Did You Know There’s A Third Option?

Beyond traditional lease or purchase, the electric car salary sacrifice scheme offers a hybrid solution.

Salary sacrifice lets employees drive new electric cars at significantly lower costs, thanks to tax and National Insurance savings.

This has become increasingly popular with companies that want to offer benefits, reduce emissions, and keep costs predictable – all without the downsides of ownership.

So, Which Is Best For You?

It depends on your business needs. Use this guide as a framework:

Business Need	Better Option
Cash flow flexibility	Leasing or Subscription
Asset ownership	Buying
Employee benefits	Salary Sacrifice
Cutting-edge EV access	Leasing
Long-term use (5+ years)	Buying
Tax efficiency	Leasing / Salary Sacrifice
Minimal admin	Subscription

In many cases, leasing or salary sacrifice schemes provide the best balance of cost control, flexibility, and tax efficiency – particularly with electric vehicles.

Start Growing Your Fleet

Choosing between leasing and buying for your business car strategy depends on your priorities: cost, control, flexibility, or tax optimisation.

With the shift toward electric vehicles and the increasing appeal of low-emission fleets, leasing or salary sacrifice schemes often deliver the best value for forward-thinking businesses.

Here at EZOO, we make it simple to access EVs through tailored subscriptions and salary sacrifice plans. It’s never been easier to futureproof your company fleet.

Frequently Asked Questions

Is leasing better than buying for small businesses?

Yes, often. Leasing helps preserve cash flow and avoids the financial burden of ownership, which can be especially beneficial for SMEs.

Can we lease electric cars through salary sacrifice?

Absolutely. Salary sacrifice schemes are one of the most tax-efficient ways to provide EVs to employees, often costing less than a rail season ticket.

Can we lease electric cars through salary sacrifice?

Absolutely. Salary sacrifice schemes are one of the most tax-efficient ways to provide EVs to employees, often costing less than a rail season ticket.

What happens at the end of a business lease?

You return the vehicle and can choose a new one. There’s no need to sell or worry about depreciation.

Are EV subscriptions the same as leasing?

Not exactly. Subscriptions are even more flexible – typically month-to-month – with fewer long-term commitments and bundled services.

What are the tax benefits of leasing electric vehicles?

Leased EVs enjoy 100% first-year allowances (if purchased), low BiK rates, no road tax, and possible VAT reclaim options – offering major savings for businesses.

Related guide: Salary Sacrifice Cars vs Personal Lease.

How EZOO’s Salary Sacrifice Scheme Simplifies EV Adoption

Transitioning to an electric vehicle (EV) can feel daunting, especially if you’re used to petrol cars, hybrids, or manual transmissions. However, EZOO’s salary sacrifice scheme makes adopting electric vehicles simpler, more affordable, and entirely stress-free.

Smooth Transition from Petrol or Hybrid to Electric

Switching from petrol or hybrid vehicles to fully electric can initially seem challenging. Concerns about range, charging infrastructure, and performance might arise. EZOO addresses these by providing extensive guidance and a premium selection of electric vehicles designed for real-life practicality. Modern EVs, such as those offered by EZOO—including popular choices like the Tesla Model 3, Audi e-tron, or BMW iX—often match or even exceed the performance of petrol equivalents, offering rapid acceleration, smoother driving experiences, and advanced technology.

Moving from Manual to Automatic

For drivers accustomed to manual vehicles, the move to an automatic EV can be equally transformative. Electric vehicles eliminate gear shifting entirely, providing a seamless and smooth driving experience. The simplicity of driving an automatic EV greatly reduces driver fatigue and allows for more relaxed and enjoyable journeys, especially in urban or heavy traffic environments.

Significant Cost Savings

Adopting electric vehicles through EZOO’s salary sacrifice scheme offers significant financial benefits compared to traditional petrol vehicles:

Fuel vs Electric Charging: Electric vehicles drastically cut down running costs. For instance, the average cost per mile for electricity can be around 4p, compared to approximately 18p per mile for petrol, creating substantial savings in everyday driving.
Reduced Maintenance Costs: EVs require less frequent maintenance due to fewer moving parts and no requirement for oil changes or traditional engine servicing.
Lower Total Cost of Ownership: Overall savings when switching from petrol or diesel to electric are considerable when accounting for fuel, tax, servicing, and depreciation costs.

EZOO’s Comprehensive Support

EZOO’s salary sacrifice scheme is designed to ease the transition at every stage:

All-Inclusive Packages: EZOO takes care of insurance, servicing, maintenance, road tax, and even provides complimentary home chargers, removing typical hassles associated with car ownership.
Flexible Options: Choose from a flexible short-term subscription or long-term lease options, accommodating your specific needs and financial circumstances.
Educational Resources and Support: EZOO provides resources and expert guidance to help drivers quickly adapt to electric vehicle driving, ensuring confidence and comfort from the outset.

Making Electric Accessible for Everyone

Whether you’re transitioning from petrol, hybrid, or manual transmission, EZOO’s salary sacrifice scheme makes it not just possible but highly advantageous. Employees benefit from significantly reduced costs, and companies benefit from providing a sought-after, premium, and sustainable perk, boosting morale and enhancing retention.

EZOO simplifies the adoption of electric vehicles through their tailored, supportive approach and comprehensive salary sacrifice scheme. Switching to electric becomes effortless and financially rewarding, enabling more drivers to experience the numerous advantages of electric vehicles.

Make the transition smoother, more affordable, and straightforward – choose EZOO and embrace a cleaner, smarter way of driving.

If you are a business owner, get in touch to find out how EZOO’s salary sacrifice scheme can become your most valued employee perk.

If you are an employee who is ready to save, refer your company today.

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Unlocking the Benefits of Salary Sacrifice for Premium Electric Vehicles

Imagine driving a luxury electric car like a Tesla Model Y, an Audi Q8 e-tron, or even a Porsche Taycan, without facing the hefty upfront costs. Thanks to EZOO’s salary sacrifice scheme, this dream is easily achievable, offering remarkable vehicles at a fraction of their typical cost.

How Salary Sacrifice Works

A salary sacrifice scheme allows employees to exchange a portion of their gross salary for a premium benefit, such as an electric vehicle. Because payments are deducted before tax and National Insurance contributions, employees can enjoy substantial savings, often between 30% and 60%, compared to traditional leasing or outright purchasing methods.
For example, a Tesla Model 3 that might typically cost upwards of £900 per month under conventional leasing terms could be significantly reduced through salary sacrifice, often making it financially accessible for professionals at all levels.

Benefits for Employees

Access to Luxury: Employees gain access to high-end vehicles without the upfront financial burden.
Significant Savings: Reduced monthly payments thanks to tax and National Insurance efficiencies.
All-Inclusive Convenience: EZOO’s comprehensive packages include insurance, servicing, maintenance, road tax, and breakdown cover, removing the typical headaches associated with vehicle ownership.
Flexible Contract Options: Choose between shorter-term subscriptions or fixed-term leases, adapting seamlessly to changing needs.

Why Company Owners and Directors Should Consider Salary Sacrifice

As a company owner or director, providing salary sacrifice options to employees isn’t just beneficial for staff, it’s advantageous for your business too:

Financial Efficiency

The EZOO salary sacrifice scheme is designed to be cost-neutral for employers. The administrative fee is directly offset by savings in National Insurance contributions and VAT, ensuring no additional cost burdens.

Enhanced Employee Satisfaction and Retention

Offering a premium benefit like access to luxury electric vehicles significantly boosts employee morale and retention. In a competitive job market, such benefits can set your business apart, making it more attractive to potential recruits.

ESG and Sustainability Commitments

Adopting a fully electric fleet helps your company meet Environmental, Social, and Governance (ESG) goals, reducing your carbon footprint and enhancing your corporate image as a forward-thinking and environmentally responsible business.

Comprehensive Early Termination Cover

EZOO offers robust early termination coverage, ensuring your business isn’t financially exposed if employees leave or face significant life changes. This coverage provides peace of mind and financial stability.

Real-Life Luxury at an Accessible Cost

Consider this scenario: through EZOO’s scheme, an employee choosing a Porsche Taycan could see their monthly costs significantly reduced compared to a conventional leasing arrangement, making what was previously an aspirational vehicle a practical reality.

Meanwhile, directors or business owners opting for high-end vehicles such as the Audi Q8 e-tron not only enjoy substantial financial savings personally but also reinforce the company’s commitment to sustainable luxury and innovation.

EZOO’s salary sacrifice scheme effectively transforms the dream of driving premium electric vehicles into an attainable reality for employees and a strategic advantage for employers. With substantial financial benefits, flexible contract options, and all-inclusive packages, there’s never been a better time to embrace this opportunity.

Unlock the power of premium EVs at a fraction of the cost and drive your business toward a greener, more sustainable future with EZOO.

Get in touch with a member of our team today to discuss how much you or your employees could save with a salary sacrifice scheme.

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How the Spring Statement Could Affect Your Next Car…And Why Salary Sacrifice Still Wins

With the Spring Statement just around the corner (26 March), many drivers and businesses are wondering what it could mean for them. While no major surprises are expected, there are key tax updates that will impact the cost of driving—especially for those considering an electric vehicle (EV).

So, let’s break it down: what’s changing, how it affects you, and why an EV salary sacrifice scheme might still be the smartest way to drive an electric car for less.

Benefit-in-Kind (BiK) Tax – Still a Bargain for EV Drivers

If you get a car through a salary sacrifice scheme, you’ll pay Benefit-in-Kind (BiK) tax on it. The government has already confirmed that BiK for EVs will rise gradually from April 2025:

Currently: 2%

April 2025: 3%

April 2026: 4%

April 2027: 5%

April 2028: 6%

That might sound like bad news, but let’s put it in perspective. The BiK rate for petrol or diesel cars can be as high as 37%! That means even with the increases, EV drivers will still save thousands in tax each year compared to those driving petrol or diesel cars.

National Insurance Changes – What It Means for Businesses and Employees

Another big update is to National Insurance Contributions (NICs):

The employer rate is increasing from 13.8% to 15%.

The threshold for paying NICs is dropping from £9,100 to £5,000.

For businesses, this means higher payroll costs. But here’s the silver lining: offering an EV salary sacrifice scheme helps reduce taxable salaries, which means lower NIC payments. It’s a win-win—employees get a cheaper car, and businesses cut their NIC bill.

Road Tax – New Costs for All Cars (But EVs Still Win!)

Starting next year, road tax is changing for all vehicles – including electric ones. Here’s what to expect:

First-year tax:

EVs: £10

Petrol/diesel (91+ g/km CO2 emissions): £390

Petrol/diesel (255+ g/km CO2 emissions): £5,490

Annual tax after the first year: £195 for all cars

Yes, EVs will no longer be fully exempt from road tax, but they’re still far cheaper to run. Over a typical 3-year lease, an EV driver could save over £5,000 in road tax alone compared to a high-emission car.

Luxury Car Tax – EVs No Longer Exempt

If your car has a list price over £40,000, you’ll have to pay an extra £425 per year for five years. EVs used to be exempt, but that’s changing. The good news? Through salary sacrifice, you’ll save up to 60% on the cost of the car anyway, meaning you’re still paying far less overall.

So, Is Salary Sacrifice Still Worth It?

Absolutely. Despite these changes, EV salary sacrifice with EZOO remains the most cost-effective way to drive a new electric car. Here’s why:

Massive Tax Savings – Up to 60% off compared to leasing privately.

Lower NICs for Employers – Cut business costs while offering a valuable perk.

Cheaper Running Costs – EVs cost less to charge, maintain, and now even in road tax.

Hassle-Free Package – Insurance, servicing, and breakdown cover are all included.

Flexible Terms – Drive an EV from as little as 3 months.

With costs rising across the board, the smartest move is to lock in lower rates now before any further changes. If your employer doesn’t offer salary sacrifice yet, now is the time to introduce them to EZOO.

We can help convince them. Get in touch now.

EZOO makes switching to an EV simple, stress-free, and cost-effective. Want to see how much you could save? Explore Salary Sacrifice with EZOO

click here to see our range of premium electric vehicles accessible via salary sacrifice or speak to an expert today.

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Salary Sacrifice Cars vs Personal Lease: Which Option Is Right for You?

What’s The Difference Between Salary Sacrifice and Personal Lease Vehicles?

Salary sacrifice and personal leasing provide two convenient ways to access a vehicle without the upfront cost of ownership. Each option comes with its unique benefits and drawbacks, making it essential to understand which suits your circumstances best.

Many companies provide both options and come with additional benefits, learn more here.

Why choose salary sacrifice?

Salary sacrifice is growing increasingly popular in the UK due to the significant cost-saving and quality-of-life benefits.

These schemes allow employees to lease a vehicle through their employer by sacrificing a portion of their salary pre-tax and there are many reasons why you may choose to do so.

View the latest deals or speak to an expert today.

What are the benefits of salary sacrifice cars?

Discounted premium vehicles

Salary sacrifice can offer savings of 30-60% on brand-new premium vehicles, with a wide range of models to suit different tastes, budgets, and requirements.

At EZOO we specialise in premium electric vehicle options, view our full list of EVs available to you here.

Tax benefits

When you pay for a vehicle through salary sacrifice, the payments are deducted from your monthly gross salary, pre-tax.

This reduces your taxable income which can in turn limit the income tax you pay, and the National Insurance contributions you make.

Convenient, full coverage

Alongside the cost-saving tax benefits of salary sacrifice cars, there are major convenience and quality of life benefits.

At EZOO, we manage your car insurance, maintenance, tax, and other expenses on your behalf and bundle them up into one monthly payment.

This saves you the hassle and time of managing these details yourself and ensures you won’t face any unexpected, unwelcome charges further down the line.

Flexible terms

Term lengths vary between providers but typically range from as short as 12 months, up to as long as 48 months.

This gives you the flexibility to commit for a longer period to spread out the cost of your contract for a reduced monthly payment or allows you to pay more each month for a shorter period.

EZOO have 3, 12, 24, 36, and 48-month contract periods to meet all needs.

What are the drawbacks of salary sacrifice?

Employer involvement

A potential drawback of salary sacrifice is that your employer must be registered for the scheme. However, referring your employer is a simple, cost-free process. Employers also benefit from reduced tax contributions, support for Net Zero goals, and enhanced employee satisfaction. Refer your employer for free here >

By joining an electric vehicle salary sacrifice scheme employers can save on tax contributions, promote Net Zero goals, and provide employees with an additional benefit, so it is a no-brainer.

Due to the employer’s involvement, the vehicle you’re leasing is tied to your job and the scheme may terminate if you leave or lose your job, it’s important to discuss these concerns.

Minimum requirements

While salary sacrifice is generally very accessible for the majority of people within all income brackets, there are minimum requirements which must be met.

EZOO for example allows employees earning as low as £20,000 per annum before deductions to participate, and the same goes for Octopus EV.

Love Electric however requires a minimum of £25,000 before deductions per annum and you must maintain over £20,000 after deductions.

Impact on pay

Of course, with part of your pre-tax salary going towards a vehicle, you will be reducing your take-home pay, after tax.

This can also reduce pension contributions, maternity pay, and other salary-related benefits.

Commitment

With salary sacrifice, you will be locked into a fixed-term agreement meaning you are committed for a certain period.

If there are unexpected circumstances requiring you to exit early, there is often a cost involved with this.

Why choose personal leasing?

Personal leasing remains a popular car financing option in the UK, offering flexibility, affordability, and convenience for individuals looking to access newer vehicles without a large upfront payment.

This type of arrangement allows individuals to lease a vehicle for a fixed monthly fee providing access to newer vehicles without the big upfront cost, along with the option to upgrade to a different car at the end of the term.

There are also business-specific routes to take which you can read more about here.

Term lengths

The term lengths of personal lease are typically similar to those of salary sacrifice with most lenders providing options within the 2 – 4 year range.

Longer terms allow for a lower monthly cost, while shorter terms provide less overall commitment and more flexibility.

What are the benefits of personal leasing?

Flexibility

Personal lease has been an option on the market for a long time and therefore there are a lot of providers to choose from, this allows the individual a lot of freedom to find and compare the deals which work best for them.

Employer involvement

As the lease is directly tied to the individual, your vehicle will have no dependency on your employment and will not be impacted by a change or loss of job.

Impact on salary

Monthly payments are made from your post-tax, take-home salary and therefore will not impact pension contributions, maternity pay, and other salary-related benefits.

This does however mean you lose out on the cost-saving tax benefits of salary sacrifice.

What are the drawbacks of personal leasing?

Tax benefits

Unfortunately, personal leasing does not provide the major cost-saving tax benefits that salary sacrifice does as payments are made from your take-home salary.

This means the amount of income tax or National Insurance you pay will not be impacted.

Additional costs

While salary sacrifice with EZOO conveniently bundles all costs into one simple, monthly cost, personal leasing will typically not include insurance, maintenance, road tax, and breakdown cover.

Some leases will also require an initial, upfront deposit.

These hidden costs could make it a more expensive option in the end.

Credit checks

Personal leasing agreements are tied directly to the individual, requiring a good credit score to qualify. This can limit accessibility for those with lower credit ratings.

Furthermore, missed payments could negatively impact your credit record interfering with future attempts at credit.

Restrictions

Personal leasing often comes with additional restrictions on the amount of mileage you’re allowed to do within each year. Exceeding the agreement can result in penalties.

The car must also be returned in good condition with any damage incurring additional charges, much the same as salary sacrifice.

Which is better?

To understand which is better, it’s important to understand the key differences between salary sacrifice and personal lease, and then compare those to your needs as an individual.

It is always recommended to speak to a professional and fully understand the range of options available to you.

	Salary sacrifice	Personal lease
Finance source	Pre-tax salary	Take-home salary
Ownership type	Employer-organised	Individual agreement
Tax implications	Subject to BIK tax	No BIK tax
Terms	1-4 years	2-4 years typically
Inclusions	Maintenance, Insurance, etc	No additional services
Choice	Subscription service available*	More freedom of choice

With the above in mind, salary sacrifice is often considered best for those in stable jobs with an interest in low-emission, electric vehicles for maximising tax benefits and going through some of the most trusted UK providers.

The all-inclusive, hassle-free packages are another very attractive benefit for those not wanting complex car expenses to sort out.

Personal leasing therefore could be seen as better for individuals who aren’t in a stable job or considering a career change within the next 2-4 years.

Also for those wanting a larger degree of choice and personalisation within their vehicle selection, this is a direction to consider.

Ultimately, the best choice depends on your financial situation, employment stability, and the type of commitment you’re looking for.

Contact our team today for advice on the right solution for you.

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