Car lease scheme – FAQs June 2020

Car lease scheme - FAQs June 2020

What type of car can I lease? Electric vehicles only. No Hybrids. Car has to be one offered by NHS Fleet Solutions (not all makes and model will be available).

How do I choose a car? You need to register with NHS Fleet Solutions on their website and then once you have done this you can generate your own quotes for cars. If you want to proceed you do so through their website. You will need to sign an agreement with NHS Fleet Solutions.

How long until my car arrives? Lead times will be quoted on the website when you choose your car. They vary from model to model.

Why only electric vehicles? Social benefits – less pollution. Cheaper for staff members as petrol, hybrid or diesel cars lead to significant additional taxes and so would be more expensive.

Who can lease a car? Age is not a barrier for main driver (if 17 you can apply for a car). Permanent CCG employee. You have to earn more than the minimum wage after deducting any salary sacrifice arrangements (i.e. childcare vouchers, pension and car lease etc).

How long is the commitment? Car leases normally run for 2 – 3 years. Shorter leases may be available if you take a car that has been returned to the lease company previously.

Can I cancel the lease? If you resign – yes. Major lifestyle change – yes. Pay reduces to a level below the National Minimum Wage – yes.

Can I have additional drivers on the car? Up to 4, but some restrictions for younger drivers linked to the insurance group of the car.

What is included in the lease? Car – can choose make, model, colour, extras etc. Insurance (business use for CCG purposes only). Maintenance. Can opt to include the installation of a charging point at home in the lease. Breakdown cover (some limitations).

Will I save money through having a lease car? As a lease car is paid for through salary sacrifice arrangements this will mean that you will pay less tax, national insurance and pension contributions. A lease car through salary sacrifice arrangements is classed as a “company car” by HMRC and so company car tax arrangements will apply. At the moment electric vehicles attract minimal amounts of additional tax, there is no guarantee that this will always be the case.

Can I buy the car at the end of the lease? You would need to discuss this with the lease company.

Can I charge the car at work? This will currently vary from site to site and will depend on the facilities available.

Will the CCG save money? The CCG will incur costs from administering the scheme but it will make some financial savings as it will pay less employer national insurance and make lower employer pension contributions.

What additional charges are there for me to pay? Examples include (not exhaustive list) Insurance excess – if you have an accident you will have to pay this separately (over 25 with 1 year driving 250). The excess is higher if you have points on your licence and if you are 25 and if you have had a licence for 1year. If you exceed the mileage you undertake to do as part of the lease then you will need to pay 12p extra per mile. Any fines ( such as speeding, parking, congestion charge). Uninsured damage costs. Any lease company admin charges for processing fines. Termination penalties.

How are additional charges collected? They will be deducted from your salary or invoiced if this is not sufficient.

Will I still be eligible to claim business mileage? We will continue to pay Agenda for Change rates on mileage. Tax is paid on any mileage earned above rates published by HMRC. For electric vehicles the amount “tax free” is only 4p per mile. You will pay tax on any mileage paid above 4p per mile at your marginal tax rate. This should mean that mileage received net of tax will always exceed the 12p excess mileage charge.

Does a car lease impact on my pension? As a lease car is paid for through salary sacrifice arrangements it will reduce your pensionable salary. The consequence during the lease is that you will pay lower pension contributions and national insurance. Through entering into a salary sacrifice arrangement this will reduce the salary used by some of the NHS Pension schemes to calculate your pension earned. This will mean a reduction in the pension you will receive on retirement.

What happens if I cancel the lease? You will be invoiced for a termination penalty, this reduces the longer you hold the car for. The penalty will be set out in the quotations you run for the car. This will be deducted from your salary, or if this is insufficient you will be invoiced. As a guide – it is 4/5 months normal monthly charge in yr1 2 months normal monthly charge in yr 2