The exponential growth of salary sacrifice

The UK new electric car market just grows and grows, thanks in no small part to the rocketing popularity of salary sacrifice cars.

I’ve just been looking at the latest October 2026 stats from the British Vehicle Rental and Leasing Association (BVRLA), which show a plus-51% year-on-year jump in salary sacrifice cars for the Q2 2026 period.

It’s the sort of growth mirrored here at Fleet Alliance. For example, customers such as Royal London have seen a very healthy take up

It’s not difficult to see why. Employees give up part of their gross salary in return for an electric car, which thanks to tax breaks makes it a win-way way into a new zero emission car.

In fact, salary sacrifice has overtaken personal leasing as a more popular method for private consumers to fund a new car, if that car is provided by their employer as a benefit. And, with more affordable electric vehicles coming to market, I can only see the appeal of this funding method widening.

While the majority of customers prefer to lease a new vehicle via salary sacrifice in order to benefit from the latest technology, along with a full warranty, some people opt for a used EV at two to four years old which lowers the monthly payment compared with a new car equivalent.

Attitudes to EVs are changing as well

It’s not only a case that more people are choosing an electric car salary sacrifice for their next car, but more people are choosing an EV.

The recent McKinsey Mobility Consumer Pulse 2026 Survey covered 20,000 mobility users across China, Germany, Japan, the United Kingdom, and the United States. It found consumer sentiment moving more positively towards electrification.

In 2024, 25% of the UK drivers surveyed said their next car would be an EV, in 2026 the figure was 30%.

For the same years, 34% said there would be one or more petrol or diesel cars before switching to an EV; now that’s down to 24%.

What really struck me was that – across all regions surveyed – when an EV joins a household of combustion engined cars, they are three to four times more likely to transition to EVs than households that own only combustion vehicles. Once you’ve experienced an EV you’re unlikely to go back.

Is salary sacrifice here to stay?

Absolutely. While the benefit in kind tax rises slightly each year out to the end of the decade, the tax rate only reaches 9%, which is a fraction of the BIK rates on non EVs, especially petrol and diesel cars, so it’s still an incredibly attractive way to lease a new car.

You might have read recently that the Government is undertaking a consultation on its ZEV Mandate (the stepped process by which manufacturers need to sell more and more EVs to reach 2035 when the sale of petrol and diesel vehicles will finish).

The consultation – and it is a consultation, and not a U-turn – invites considered views on how to best manage this transition. And clearly salary sacrifice remains a key part of this zero emission switch.

So salary sacrifice is growing.

And we don’t expect the growth to tail off as more employers see the advantages of offering such an advantageous employee benefit and more consumers understand the benefits of changing to electric driving.