Jackson Lee Underwriting has today launched electric vehicle early termination cover for companies participating in salary sacrifice schemes.
Early Termination insurance protects companies supplying electric vehicles (EVs) as part of a corporate salary sacrifice scheme against the financial penalties of early redemption, for example if an employee resigns, loses their license on medical grounds, or falls sick. Electric vehicle company benefits are becoming increasingly popular as a part of company tax planning, enhanced employee benefits and as a way for companies to improve their corporate social responsibility.
Normally a car wouldn’t make financial sense on a salary-sacrifice scheme because it would attract a level of company car taxation above any achievable saving. However, due to EVs and some Plug-in Hybrid Electric Vehicles (PHEVs) attracting very low Benefit-in-Kind taxation, it’s these cars that can offer serious savings. These savings can be more than a third for a 20% tax band employee and nearing half for a 40% taxpayer. When you consider that a typical EV can have a monthly lease cost of around £600, saving £200 or £300 a month, suddenly makes EVs look very attractive.
An electric vehicle salary sacrifice scheme lets an employee pay for an electric car each month using their gross salary – that’s before tax and other contributions are deducted. It is the same as other salary sacrifice schemes, such as childcare, cycle to work schemes or pension contributions. If employees leave the company however, then the employer becomes financially responsible for any early termination charges from the leasing company.
The policy is underwritten by Great American Insurance International (UK) Limited.
Nick Mohan, Joint Managing Director at Jackson Lee Underwriting, comments:
“Businesses will be aware of the growing demand for electric vehicles, and it is picking up pace as businesses consider their environmental strategy. The figures are even higher in Europe. Many governments have announced their intent to be fully battery electric by 2030. This is a sizable and growing market opportunity for brokers.
Electric vehicles are here to stay and current salary sacrifice schemes make them a very attractive proposition right now. For brokers with corporate clients considering salary sacrifice schemes, this would greatly enhance their portfolio. Next April’s national insurance increase will only make the scheme more attractive. We have a reputation in the market for spotting market needs and creating innovative niche insurance products just at the right time for brokers to maximise the market opportunity and we’re delighted to launch this new product – one in a range of electric vehicle related policies that we plan to launch this year.”