Is a Used Electric Car Through Salary Sacrifice Really Cheaper?
Source: Honda Media
Used EV salary sacrifice delivers the same income tax and National Insurance savings as a new car on the same scheme - applied to a vehicle that's already absorbed the steepest portion of its depreciation. The result is a lower gross sacrifice, a lower net monthly cost, and in most cases a premium brand at a price point that a new entry-level car can't match. A used MG4 through The Electric Car Scheme costs £259/month net on a £60,000 salary. The new equivalent on the same scheme costs £340/month. That's £81/month less for the same car, same tax rate, and the same all-inclusive package of insurance, servicing, and breakdown cover.
The 4% Benefit-in-Kind rate for 2026/27 applies to used electric cars exactly as it does to new ones - a detail that surprises many employees. Combined with falling used EV prices across the UK market, it means the case for a used electric car through salary sacrifice has never been stronger. Around 80,000 UK employees are already driving via salary sacrifice schemes, with uptake rising 68% in recent years. The numbers below show exactly why.
Why Does a Used EV Cost Less Through Salary Sacrifice?
The core mechanism of salary sacrifice is that your monthly payment comes from your gross salary before income tax and National Insurance are deducted. That makes every pound you sacrifice worth more than a pound spent from take-home pay. A 40% taxpayer sacrificing £357/month for a used MG4 effectively pays £259/month once the tax and NI savings are applied.
EVs are particularly compelling because the steepest drop in the car's value has already happened before it reaches you. The first owner absorbed that loss, which is why the monthly lease cost on a used car is lower. Used EVs on The Electric Car Scheme are typically under three years old and sourced from corporate fleets and former leases, which means full service history, known usage patterns, and, in most cases, an active manufacturer warranty. Used EV prices across the UK market have also been falling, compounding the advantage.
The Benefit-in-Kind rate for electric vehicles sits at 4% for 2026/27, and that rate applies whether the car is new or used. That surprises many employees who assume used cars carry a higher BiK liability. A two-year-old Tesla Model 3 attracts the same 4% BiK rate as a brand-new one. That keeps the net monthly cost competitive even on higher-value used models. Petrol and diesel company cars, by comparison, attract BiK rates of up to 37%.
Key Takeaways
Used EVs attract the same 4% BiK rate in 2026/27 as new electric cars
The steepest drop in a used EV's value has already happened before you lease it
Used EVs on the scheme are typically under three years old with full service history
Falling used EV prices across the UK market compound the salary sacrifice savings
How Much Do Used and New EVs Cost With Salary Sacrifice?
Here's how the costs compare for an employee on a £60,000 salary, on a three-year term at 10,000 miles per year. All figures are based on a flat payment profile and include the full all-inclusive package.
MG4
The MG4 is one of the most popular electric cars on The Electric Car Scheme, and consistently one of the most affordable. It's a practical family hatchback with a real-world range of up to 281 miles, making it a strong choice for everyday commuting and longer runs alike.
| Used MG4 | New MG4 | |
|---|---|---|
| Gross monthly sacrifice (inc. VAT) | £357 | £488 |
| Income tax saving | -£143 | -£195 |
| National Insurance saving | -£7 | -£10 |
| Average BiK tax over term | £52 | £57 |
| Net monthly cost | £259 | £340 |
| Monthly saving vs new | £81 | |
| 3-year saving | £2,916 |
Tesla Model 3
The Tesla Model 3 is the UK's best-selling electric car and one of the most searched-for models on The Electric Car Scheme. It combines a real-world range of up to 390 miles with over-the-air software updates that keep the car up to date throughout the lease term.
| Used Tesla Model 3 | New Tesla Model 3 | |
|---|---|---|
| Gross monthly sacrifice (inc. VAT) | £536 | £669 |
| Income tax saving | -£214 | -£268 |
| National Insurance saving | -£11 | -£13 |
| Average BiK tax over term | £113 | £73 |
| Net monthly cost | £424 | £461 |
| Monthly saving vs new | £37 | |
| 3-year saving | £1,332 |
The MG4 figures tell the cleaner story. A lower vehicle value means a lower gross sacrifice, and the tax savings follow proportionally. The net result is £81/month less than the new equivalent, with no reduction in what's included.
You may have noticed the used Tesla Model 3 carries a higher BiK tax figure than the new one because BiK is calculated on the P11D value of the specific vehicle at the point of sacrifice, and used car P11D values don't always follow a straightforward pattern relative to new list prices. Despite that, the net monthly cost on the used Model 3 is still £37/month lower than new. The depreciation advantage outweighs the BiK differential.
To see what a specific used EV would cost on your salary, use the salary sacrifice calculator.
Key Takeaways
A used MG4 costs £259/month net, saving £81/month compared to the new equivalent
A used Tesla Model 3 costs £424/month net, saving £37/month compared to new
The 3-year saving on a used MG4 vs new on the same scheme is £2,916
Use the salary sacrifice calculator to see what a specific used EV costs on your salary
How Does a Used EV on Salary Sacrifice Compare to a Personal Lease?
A personal lease means paying from your take-home pay with no tax savings and no bundled package. Salary sacrifice means paying from your gross salary before tax, with insurance, servicing, and breakdown cover included. Here's how the used MG4 compares across both options for a 40% taxpayer on a £60,000 salary.
| Used MG4 via Salary Sacrifice | Used MG4 via Personal Lease | |
|---|---|---|
| Monthly payment source | Gross salary (pre-tax) | Net salary (post-tax) |
| Income tax saving | Yes | No |
| National Insurance saving | Yes | No |
| Insurance included | Yes | No |
| Servicing and maintenance included | Yes | No |
| Breakdown cover included | Yes | No |
| Early exit protection | Yes, from day one | Penalty charges apply |
| Net monthly cost | £259 | £357+ (lease cost only, extras additional) |
The £357 personal lease figure reflects the gross sacrifice amount as a comparable lease cost baseline. On top of that, a personal lessee would typically pay separately for insurance, servicing, and breakdown cover, bringing the real monthly outgoing considerably higher. For a full comparison across salary sacrifice, personal lease, and PCP, the salary sacrifice vs personal lease vs PCP guide covers the complete cost breakdown.
Key Takeaways
A personal lease is paid from net salary with no tax savings and no bundled package
Used MG4 via salary sacrifice costs £259/month net vs £357+ on a comparable personal lease
Salary sacrifice includes insurance, servicing, and exit protection that a personal lease doesn't
The net saving over a personal lease compounds further when bundled extras are factored in
What's Included In The Monthly Salary Sacrifice Cost?
The monthly cost on both new and used electric cars through The Electric Car Scheme includes:
The car
Comprehensive insurance
Routine maintenance and servicing
MOT where applicable
Breakdown cover
There's no deposit required and no separate arrangement needed for insurance or servicing. Everything is bundled into the single monthly sacrifice, which comes out of your gross salary before tax.
Every lease also comes with Complete Employer Protection from day one, which covers redundancy, dismissal, and long-term sickness with no excess and no limit. For employees who want to cut their charging costs too, The Charge Scheme is available alongside salary sacrifice to reduce home, workplace, and public charging costs by up to 50%.
Key Takeaways
Insurance, servicing, maintenance, and breakdown cover are all included
No deposit is required on new or used electric cars through the scheme
Complete Employer Protection covers redundancy, dismissal and long-term sickness from day one
The Charge Scheme can reduce EV charging costs by up to 50% alongside salary sacrifice
Who Is Used EV Salary Sacrifice Best Suited For?
Used EV salary sacrifice is best suited to employees who want to drive a premium electric car but find new models financially out of reach.
Research from The Electric Car Scheme's EV salary sacrifice statistics report found that 29% of people leaders cite inclusive access to EVs as the biggest benefit of salary sacrifice schemes, ahead of administrative simplicity and brand access. Used EVs through salary sacrifice address that affordability gap directly, bringing models like the Tesla Model 3 and MG4 into reach for employees who'd otherwise be looking at entry-level new cars at similar monthly costs.
It's also well-suited to employees who need a car quickly. Used EVs on The Electric Car Scheme are available for delivery in around 14 days, compared to 4 to 16 weeks for a new EV, depending on model and specification. If you want to understand what owning a used EV through the scheme is actually like day-to-day, the experiences of existing drivers are worth reading before you commit.
One consideration worth checking before you sign up is whether reducing your gross salary affects any salary-linked calculations, such as mortgage affordability assessments. In most cases, the impact is minimal compared to the monthly savings, but it's worth reviewing your specific circumstances first.
Key Takeaways
Used EV salary sacrifice suits employees priced out of new electric car models
Delivery on used EVs takes around 14 days vs up to 16 weeks for new
The same scheme and package applies whether you choose new or used
Check any impact on mortgage affordability before committing to a salary sacrifice agreement
Frequently Asked Questions
Is a Used Electric Car on Salary Sacrifice as Good as a New One?
In most practical respects, yes. Used electric cars on The Electric Car Scheme are typically under three years old, sourced from corporate fleets with full service history, and in the majority of cases still covered by the manufacturer's original warranty. Battery degradation isn't a significant concern at this age - EV batteries are designed to retain most of their capacity for 15 years or more. You get the same all-inclusive monthly package as on a new car, including insurance, servicing, and Complete Employer Protection from day one.
What Used Electric Cars Are Available Through Salary Sacrifice?
The Electric Car Scheme offers hundreds of used EVs across a wide range of makes and models, including Tesla, MG, Polestar, BMW, Mercedes, Jaguar, Audi, and Skoda. Stock refreshes regularly, and prices vary depending on age, mileage, and specification. You can browse current availability and filter by budget, range, and model directly on the used EV page. If you're looking for the most affordable options currently available, the best cheap used EVs guide is a useful starting point.
How Old Are Used Electric Cars on Salary Sacrifice Schemes?
Used electric cars on The Electric Car Scheme are typically under three years old and have had one previous owner, usually a corporate lessee. That gives a known usage pattern and full service history, which is why the scheme can offer the same comprehensive package on a used car as on a new one. Mileage, age, and condition details are listed for every car before you commit.
Does Salary Sacrifice Work the Same Way for Used and New Electric Cars?
Yes. Salary sacrifice works the same for used and new vehicles. Your employer leases the car and deducts the cost from your gross salary, reducing your income tax and National Insurance liability. The 4% BiK rate for 2026/27 applies to both. The only difference is the gross monthly sacrifice amount, which is lower on a used car because the vehicle's value and, therefore, the lease cost is lower. For a full breakdown of how salary sacrifice compares to a personal lease, the salary sacrifice vs personal lease guide covers this in detail.
Used EV salary sacrifice closes the gap between wanting a premium electric car and being able to afford one. The same tax mechanism, the same all-inclusive package, and the same 4% BiK rate for 2026/27 applied to a car that's already lost the sharpest edge of its depreciation. For a 40% taxpayer on a £60,000 salary, a used MG4 costs £259/month net. A new one costs £340/month. That's a genuine saving, not an accounting trick.
The scheme works identically for used and new vehicles; the cars are typically under three years old with full service history, and delivery takes around 14 days. If you're ready to see what a specific used EV would cost based on your own salary and tax band, the salary sacrifice calculator gives you a personalised figure in minutes.
Browse used EVs on The Electric Car Scheme website now, and see how much you can save!
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Last updated: 29/05/26
Information and prices provided are accurate at the time of release and may be subject to change. Our pricing is based on data collected from The Electric Car Scheme quote tool. All final pricing is inclusive of VAT. All prices above are based on the following lease terms; Using a flat payment profile, 10,000 miles pa, 36 months, and are inclusive of Maintenance and Breakdown Cover. The Electric Car Scheme’s terms and conditions apply. All deals are subject to credit approval and availability. All deals are subject to excess mileage and damage charges. Prices are calculated based on the following tax saving assumptions; England & Wales, 40% tax rate. The Electric Car Scheme Limited provides services for the administration of your salary sacrifice employee benefits. The Electric Car Scheme Holdings Limited is a member of the BVRLA (10608), is authorised and regulated by the FCA under FRN 968270, is an Appointed Representative of Marshall Management Services Ltd under FRN 667174, and is a credit broker and not a lender or insurance provider.
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