Personal Finance

Is salary sacrifice a good idea for purchasing a car?

salary sacrifice cars

That’s a question many people ask themselves and it is not always an easy one to answer. Here we will take a look at salary sacrifice, what it means and whether or not you should use it.

If you don’t know what salary sacrifice is, the basic idea of it is that instead of buying something with your own money, you use money from your salary instead.

For example, If you wanted to buy a car, you could sacrifice some of your salaries each month to pay for the car, and this way it will be put together with all your other monthly expenses.

The first thing that is important to understand about salary sacrifice as a whole is that there are both pros and cons to using it. Here are some of the main points to be aware of: 

Pros of Salary Sacrifice Cars

-If you are low on cash, using your salary to buy a car can be helpful because instead of having to pay for it in one big sum, you’ll get the payments over time.

-It also means you won’t have to save for so long before buying the car, which can be difficult if you don’t have any spare savings.

-It is easy to budget a salary sacrifice car, as you know exactly how much you will be paying towards it each month and can plan your expenses accordingly. 

-You may get tax benefits from using this method to buy a car.

Cons of Salary Sacrifice Cars

-If the value of the car drops faster than your monthly payments, you may end up owing more on the car than it is actually worth.

-You might end up paying a lot of interest on your loan if you don’t have enough money to pay for the car in one go, which can make it difficult to manage your savings.

-If you are not able to afford all your monthly expenses and the sacrifice payment as well, your credit rating can be affected and you may end up losing some of your amenities like TV or internet. 

-There may also be penalties for breaking this contract that might end up costing you even more money.

The Big benefit! 

Electric cars are becoming increasingly popular due to their environmentally-friendly credentials and the money you can save on running costs. You can often get Electric cars far cheaper through salary sacrifice schemes as they offer discounts on greener vehicles. 

The Electric car salary sacrifice scheme is a relatively new one, but it is becoming more popular each year. Electric cars are perfect for taking advantage of this method because they are cheaper to run than normal cars and much easier on the environment.

There are also often other benefits once you own an electric car through the salary sacrifice scheme, like free charging points at work and free charging stations in some areas. Electric cars are becoming more popular all the time, but if you can’t afford to buy one outright, using a salary sacrifice scheme might be a good way to go.


Is salary sacrifice a good idea for purchasing a car? Yes! It gets you a brand new car for a fixed contract amount that is easier to budget and affordable than buying a car outright or through a high-interest bank loan.

Also Read: How to Save Money and be Financially Independent in 2022

CEO & Editor
I'm Ved Prakash, Founder & Editor @Newsblare Media, specialised in Business and Finance niches who writes content for reputed publication such as,, Motley Fool Singapore, etc. I'm the contributor of different... news sites that have widened my views on the current happenings in the world.

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