By Cheryl Clements, Head of Business Development, Tusker

Salary sacrifice vehicle schemes have transformed the company car system we once knew. Traditionally, cars were often only offered to senior, higher-paid employees or those that rely on vehicles for their role. 

However, by allowing drivers to access a car through a pre-tax salary sacrifice scheme like Tusker’s, both employees and employers gain significant savings. This shift has made electric, hybrid and petrol vehicles far more accessible, while offering a convenient, all-inclusive way to budget for motoring. 

Yet, there is a vital aspect of a vehicle salary sacrifice scheme that isn’t always considered in enough detail - protection.

 The hidden risk in some salary sacrifice schemes

So much about salary sacrifice, particularly car schemes, is fantastic. Who wouldn’t want a brand new or pre-loved car that can create significant cost-savings?

However, without the proper protection, there’s a potential downside. 

If an employee leaves their job early - whether through resignation, redundancy or long-term illness - they could be liable for early termination fees. Unfortunately, these costs can be expensive as they’re designed to cover the remaining payments on a vehicle. 

This uncertainty may put off many employees. Fears around long-term planning and job stability are common, and valid reasons for not considering a car salary sacrifice scheme.

However, when lifestyle protection is included, it makes long-term schemes safer - for employees and employers.

What is Lifestyle Protection?

Lifestyle Protection is a built-in safeguard in Tusker’s car scheme which helps remove as much risk as possible. Essentially, it protects both employees and employers from expensive early termination fees in the event of unexpected circumstances which impact the ability to continue an agreement. And protections like these are not the same from all providers.

Tusker’s protection includes:

  • Comprehensive protection in cases of resignation, redundancy, retirement and TUPE. 

          At Tusker, we understand that predicting retirement, resignations, a restructuring or a TUPE situation is not always possible. As a result, in these scenarios schemes allow employees and employers to hand back their car three months after delivery without any termination fee. 

  • Maternity, paternity, shared parental leave and adoption.

          Lifestyle Protection also covers new parents - as long as the new car hasn’t been ordered within three months of the employees’ due date or adoption approval date. The protection covers the full Gross Reduction amount at the point the employee drops to Statutory pay, meaning  employees can keep their new car without having to worry about paying too much while on a reduced salary through parental leave.

          Due to employment law, many businesses want to continue supporting their employees’ mobility as they become new parents. While the  employee’s pay is enhanced, salary sacrifice reductions can continue. When the employee is in receipt of statutory pay employers can no longer make deductions.

          Tusker continues to send monthly payment invoices which will need to be paid. However, when the employee returns to work, the gross  monthly salary sacrifice up to 12 months can be claimed, significantly reducing liability.

  • Long term sickness 

           Lifestyle Protection also covers cases of long term sickness, with the protection covering the early termination charge as long as the car has  been delivered over three months before the start date of sick leave.

           In cases where employees lose their license on medical grounds, death in service, terminal illness, disablement, mental illness and loss of sight or limb, the early termination charge is covered regardless of when the car Agreement was signed or the car was delivered. It is important to note however that it doesn’t cover early termination charges in relation to loss of license due to convictions, reduction working hours, career breaks and dismissal.

Why this matters

The biggest benefit of lifestyle protection is peace of mind. Through Tusker, employees can access a brand new car while making considerable savings, without having to deal with the added worry of how unexpected scenarios could impact their terms and produce additional financial pressures. Tusker has turned a potentially risky decision into a smart, secure and flexible one.

For employers, it also adds an additional layer of security. Without it, organisations could be exposed to financial risk if an employee leaves and the lease agreement still needs to be honoured. Although this can create administrative complexity and unexpected costs, Tusker’s Lifestyle Protection is a safeguarding measure.

Lifestyle Protection also simplifies scheme management, protects employers from liability in early termination charges and strengthens the overall employee value proposition - increasing engagement by making the benefit more attractive and lower risk.

The Tusker difference

While some providers offer some form of protection, Tusker’s scheme is notably comprehensive, and offers a range of additional perks. These include:

  • Broad coverage of a wide range of life events, not just redundancy and illness, but also resignation and even family-related leave in many cases. It reflects the reality of employees’ lives today - helping provide security, boost engagement and maximise uptake. 
  • Balanced protection for all parties, with the scheme being designed to reduce financial risk for both employees and employers.
  • A clear waiting period, with Lifestyle Protection normally applying after 3-months, helping provide greater clarity of which situations employees are protected in.
  • Immediate cover for critical situations - such as death or terminal illnesses.
  • Lifestyle Protection is part of Tusker’s broader package which also includes comprehensive insurance; servicing and maintenance; MOTs; breakdown cover and road tax.
  • Tusker supports the electrification of a company’s fleet, reducing financial risk and barriers associated with electric vehicles and their up-front costs. This is powerful for ESG credentials, improving air quality and business sustainability, while also enhancing employer branding.

Interested in a car scheme that enhances employee mobility, supports the environment, strengthens your employee value proposition, and removes financial risk? Visit Tusker

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