Leasing giant Zenith is expanding its salary sacrifice program to include recently de-fleeted electric vehicles, aiming to invigorate the sluggish used EV market and make electric driving more accessible for employees. This move comes as demand for used EVs lags behind supply, despite the growing number of end-of-contract company cars becoming available.
How Salary Sacrifice Works
Salary sacrifice schemes allow employees to lease a vehicle through their employer, paying for it with pre-tax salary. For vehicles emitting 75g/km of CO2 or less, the taxable benefit is calculated at lower company car rates than the equivalent income used for direct purchase. This makes leasing, particularly for low-emission vehicles, financially attractive.
The Shift to Used EVs
By incorporating used EVs into its offerings, Zenith can lower monthly rental costs while still benefiting from favorable company car tax rates. The taxable value is tied to the vehicle’s original list price, effectively shielding it from inflation. This approach addresses a key barrier to EV adoption: affordability.
Market Trends and Industry Pressure
The move follows observations from the British Vehicle Rental and Leasing Association (BVRLA) that several firms are investing in used leasing to mitigate the financial impact of steeper-than-expected depreciation. Rapid depreciation drives up monthly rental costs for new vehicles, making used options more competitive.
Rapid Growth in Used EV Leasing
Uptake of ‘second-life’ leasing is growing rapidly. In Q2 2025, BVRLA members reported 40,608 used cars on their fleets, a 166% year-on-year increase. Of those, 3,990 were on salary sacrifice schemes, representing a staggering 7,000% rise compared to the same period in 2024. This demonstrates a clear shift in consumer behavior and industry adaptation.
Supply-Demand Imbalance and Technological Obsolescence
Despite the growth, demand for used EVs remains constrained. The BVRLA notes that aggressive discounting (driven by government mandates) and rapid technological advancements incentivize drivers to opt for new models instead of holding onto older EVs. This creates a bottleneck of supply as more end-of-contract company cars become available.
Industry Calls for Further Incentives
The BVRLA is advocating for a 0% company car tax rate for EVs over three years old to further stimulate the market. This would incentivize both employers and employees to embrace used EVs, accelerating the transition to electric mobility.
The Risk of Rising Costs
BVRLA chief executive Toby Poston warns that low demand creates a financial risk for those leading the way in used EV leasing. He suggests that the cost of sourcing new EVs will inevitably rise to cover this risk, potentially slowing down adoption at the front end.
Zenith’s Approach: Speed and Convenience
Zenith’s digital portal allows salary sacrifice users to select specific vehicles from stock, with potential delivery times as short as 14 days and contracts from 12 months. This flexibility removes the need for long-term commitments, making the option more appealing to drivers.
Quality Assurance
Andy Wolff, Zenith’s commercial director, emphasizes that all vehicles undergo a rigorous quality check, including an AA safety inspection, full service history, and a comprehensive service and maintenance package. This ensures drivers receive reliable and well-maintained vehicles.
Conclusion: Zenith’s expansion into used EV salary sacrifice schemes addresses a critical gap in the market by making electric driving more affordable and accessible. By leveraging tax incentives and offering flexible contract terms, the company aims to stimulate demand for used EVs while mitigating the financial risks associated with depreciation and technological obsolescence
