Leasys to launch salary sacrifice scheme

Leasys will launch a car salary sacrifice scheme in the UK by the beginning of next year as it targets a slice of the growing employee benefit market.

Figures published by HMRC just last week, showed how the company car market has finally turned a corner thanks, in part, to the reported growth in salary sacrifice for cars, with the number of employees paying benefit-in-kind (BIK) tax on a vehicle, up 40,000 year-on-year.

Separate figures from the British Vehicle Rental and Leasing Association (BVRLA) Leasing Outlook report, published in April, showed the volume of cars being delivered through salary sacrifice schemes was up 47% year-on-year.

“As we all know, it is one of the areas that is growing the most in the leasing arena,” said Sebastiano Fedrigo, Leasys international markets director.

“We are investing heavily to be ready by the end of this year, possibly the beginning of next year with our own (salary sacrifice) proposition.”

He told Fleet News that salary sacrifice is “fundamental” to electrification and the growth in electric car sales. “It’s such an attractive proposition, it makes sense,” he continued.

“It is the right approach for us to continue to stimulate and drive the change to electrification.”

He explained: “We’ve been investing quite heavily. We have had a lot of resources behind it, and it is the product that we need to focus on now, because it’s the product that is lacking for us in the UK market.”  

Update on merger

Leasys and Free2Move signed a memorandum of understanding towards the end of 2021, almost a year after Peugeot/Citroen parent PSA acquired Fiat/Alfa Romeo parent FCA to create Stellantis, becoming the world’s fourth biggest vehicle manufacturer.

The move, partly instigated to streamline the financial services operations across the PSA, FCA and Vauxhall/Opel partners, culminated in the creation of a single leasing company in April, last year, under the Leasys brand name (Free2Move still exists as a mobility brand in Europe).

Fedrigo (pictured below), the former Leasys UK managing director who was appointed to oversee the merger, became international markets director in April 2023, while ex-Free2Move managing director Matthew Boswell heads the consolidated UK business. 

Giving an update on the merger of the two leasing companies, Fedrigo told Fleet News: “In any merger of such size there are always some teething problems.

“We have encountered some issues on the European side mostly, but when we look at the rollout of the merger in the UK, was one the smoothest countries we have seen.”

He acknowledged, however, there was a “bit of a glitch” in the first two or three months while new software was rolled out to dealers, which used to be under the PSA banner, and training was undertaken.

This, he said, had resulted in a bit of a slip in the volumes, but now having been resolved order uptake was so far up 64% year-on-year.

“The corporate channel is quadruple the volume, which is really good,” he added. “The broker channels as well is up year-on-year.”

Risk fleet target

According to last year’s FN50, Leasys UK was ranked the 10 largest vehicle leasing with a risk fleet of 50,815 cars and vans.

In 2022, prior to its merger with Free2Move Lease, Leasys was ranked 15th with a risk fleet of 22,082 vehicles. Free2Move in the same year had risk fleet of 54,480 vehicles, which when combined with Leasys should have pushed it even higher up the FN50, last year.

However, Fedrigo explained that Free2Move leases are only being transferred across to Leasys’ risk fleet once they renew with the new combined entity.

“We have a good renewal rate,” he said. “It’s not where we want it to be. We were aiming at 75%, we are below that... We were a little bit bullish maybe with a 75% renewal rate, but we are well above the previous loyalty rate of leases so it's great.”

But what does that mean for its previous stated aims of reaching a risk fleet of 100,000 vehicles by the end of 2026?

Fedrigo told Fleet News: “It is still our aim and our plan. It is a major challenge in the course of two-and-a-half years to double the fleet, but we are still aiming for that and whether we do it organically and maybe ‘inorganically’ as well, it's still our target.”

From a fleet perspective, he says that the merger means it can “really talk to our corporate customers with confidence on having everything that goes from the micro ‘a’ segment all the way up to six-tonne LCV vehicles with all sorts of powertrains”.

Leasys is able to give former Free2Move customers access to a multi-branded proposition, which has also helped boost its corporate appeal, according to Fedrigo.

However, he says its main area of focus has been customer satisfaction, with it currently holding a net promoter score (NPS) of 45, suggesting customers are more than satisfied with the service they are receiving.

“It’s testimony to the fact that we are providing a good level of service to our customers,” he added. “This is something that we’ve been really working on. We’ve introduced new processes. We’ve invested in new people.”

It has also invested in new technology with the ‘My-Leasys’ portal where fleets and drivers can access relevant information and is due to launch an enhanced user-chooser platform soon.