{"id":2694,"date":"2024-01-31T10:00:23","date_gmt":"2024-01-31T10:00:23","guid":{"rendered":"https:\/\/salary-sacrifice.com\/?p=2694"},"modified":"2024-02-09T13:11:42","modified_gmt":"2024-02-09T13:11:42","slug":"what-is-early-termination-insurance","status":"publish","type":"post","link":"https:\/\/dev.spencerhayesgroup.co.uk\/salarysacrifice\/what-is-early-termination-insurance\/","title":{"rendered":"What is Early Termination Insurance?"},"content":{"rendered":"

Early Termination Insurance<\/strong>, also known as ETI, is a cover designed for employers to detach them from long-term commitment on a lease for a salary sacrifice car lease. As an employee’s circumstances change expectedly and unexpectedly. Enabling the employers to give the vehicle back.<\/p>\n

Early Termination Insurance Explained for Electric Vehicle Salary Sacrifice<\/strong><\/h5>\n

There is no doubt that salary sacrifice offerings that enable employees to access a fully insured and maintained electric vehicle at a \u2018cut priced\u2019 cost, it\u2019s a huge benefit. Not only for the employee but also the employer that received NIC (National Insurance Contributions) savings plus an excellent employee retention benefit.<\/p>\n

Employers need to be mindful that in the event that an employee does leave the company or circumstances change which results in the employee being able to continue paying, without Early Termination Insurance<\/strong>, the employer would be left with continuing to pay for the lease vehicle or returning the vehicle and paying any applicable early termination charges. Please note, this is not an option for maternity or paternity leave \u2013 you\u2019re not allowed to take the vehicle from the employee.<\/p>\n

What happens to the Electric Vehicle when an employee leaves?<\/strong><\/h5>\n

If an employee leaves the company, then the vehicle can be returned, however typically the cost for doing this amounts to 50% of the remaining lease costs. This is where Early Termination Insurance<\/strong> will benefit your salary sacrifice offering.<\/p>\n

\"Spencer<\/p>\n

What happens to the Electric Vehicle lease if an employee wants to leave?<\/strong><\/h5>\n

Not as easy as it sounds, the lease agreement is with the employer not the employee. Switching from a business lease (unregulated) to a personal lease (regulated) is extremely difficult and in most cases impossible.<\/p>\n

Can the new employer take over the lease?<\/strong><\/h5>\n

It is an option but again difficult, there is no guarantee that the new employer will want to do this, especially if they don\u2019t have a current salary sacrifice scheme. The new employer would need to go through an underwriting process and may not meet the criteria of the lender. Even if they do, then at very least they\u2019ll need to pay an administration charge and also a minimum amount of lease remaining, typically 12 months. As there are no guarantees surrounding this, it\u2019s an option that\u2019s completely out of your control.<\/p>\n

What is the best option for terminating a Salary Sacrifice Lease early?<\/span><\/strong><\/h5>\n

There are multiple options available to an employee to consider in this eventuality:<\/p>\n