Beyond TCO and Salary Sacrifice: Why Affinity Schemes Deliver Greater Value for OEMs, Fleets and HR Teams

The conversation around fleet and employee mobility is changing fast. According to the Arval Mobility Observatory, almost half of UK fleets (48%) now cite managing Total Cost of Ownership (TCO) as their biggest challenge - a sharp rise from 31% last year. Rising maintenance, insurance and finance costs, combined with uncertainty over electric vehicle (EV) values, are putting pressure on every part of the automotive ecosystem.

At the same time, HR departments are under growing pressure to offer meaningful, flexible benefits that help attract and retain staff, while aligning with ESG goals and cost control measures. Mobility - once the preserve of fleet or company car policy - has now become an integral part of HR strategy.

For OEMs, this convergence between fleet, HR, and cost management creates a unique opportunity. The question is how to respond with agility, compliance, and brand protection. Increasingly, Affinity Schemes are proving to be the answer.

Salary Sacrifice: Powerful but Limited

Over the past few years, salary sacrifice car schemes have become a popular way for employees to access new cars, particularly EVs, through pre-tax deductions that lower their taxable exposure. These programmes undoubtedly have their place - but their reach and flexibility are limited.

They tend to favour higher earners on stable contracts and can quickly exclude staff where salary reductions would breach minimum wage thresholds. They also come with administrative complexity for HR and finance teams, from payroll integration to compliance checks, and carry risk if employees leave mid-term.

Salary sacrifice also lowers contractual gross pay, which can reduce the bases used for maternity/paternity/adoption pay, pension contributions, life assurance multiples, overtime and redundancy calculations (subject to scheme and employer policy).

For many businesses and OEMs, a more inclusive, flexible, and brand-aligned solution is needed - one that delivers real value without the payroll and compliance overhead. This is where affinity comes into its own.

Affinity car schemes typically offer far broader vehicle choice than salary sacrifice: because there’s no need to chase ultra-low BIK to make the numbers work, employers can make petrol, diesel, hybrid and electric options available on equal footing - rather than the largely EV-focused line-ups common in salary sacrifice.

The Affinity Advantage

An Affinity Scheme allows OEMs to offer preferential vehicle access to defined groups - from corporate employees and public sector workers to the staff within their own franchised dealer networks. Crucially, it gives manufacturers full control: they decide who can access the scheme, which models to promote, what discounts to apply, and the terms of participation.

For OEMs, the benefits are clear. Affinity creates a controlled sales channel that builds incremental volume without undermining brand equity or residuals. It helps move stock strategically - for instance, focusing on EVs or balancing older inventory - while maintaining pricing integrity and customer confidence. Vehicles are typically returned after three years, generating a predictable pipeline of one-owner, full-history used cars for the approved retail network.

For fleets and employers, affinity offers a simple, tax-safe complement to salary sacrifice. Staff can access new, efficient vehicles directly from manufacturer-supported schemes, without complex payroll deductions or employer liability. This reduces TCO exposure, minimises grey fleet risk, and supports sustainability goals by replacing older, higher-emission cars with newer, cleaner models.

And for HR teams, the advantages are increasingly compelling. Unlike salary sacrifice, affinity can include all employees - not just those who meet strict payroll thresholds. It enhances the employee value proposition by offering a real-world, high-value benefit that reinforces engagement and retention. It’s also simple to manage: VPS provides a fully branded online platform, robust eligibility checks, and integrated dealer CRM links, removing administrative burden entirely.

A Smarter, More Inclusive Mobility Strategy

Affinity Schemes don’t compete with salary sacrifice - they complement and often exceed it. A hybrid approach allows employers and OEMs to offer both: salary sacrifice for eligible staff and affinity for the wider workforce.

As tax regimes shift and EV uptake accelerates, affinity provides the flexibility to adapt quickly - absorbing those who move out of salary sacrifice, supporting residual protection, and ensuring every new vehicle placed supports both brand and business goals.

Recent Fleet News coverage makes it clear that cost management, electrification, and employee engagement are the defining challenges of 2025. Affinity brings those threads together. It helps OEMs achieve incremental, high-quality sales, helps fleets reduce cost and complexity, and helps HR teams enhance their people proposition - all while supporting the industry’s broader sustainability transition.

The VPS Solution

At VPS, we design and operate turnkey affinity programmes for leading OEMs, combining technology, compliance, and commercial expertise. Every scheme includes a fully branded digital platform, integrated configurator, dealer portal, robust verification tools, and marketing support.

By simplifying the process for manufacturers and their dealer networks, VPS allows OEMs to focus on strategy and growth - while ensuring that every affinity scheme drives volume, loyalty, and value across fleet, HR, and brand channels.

Sam Shah, Managing Director of VPS, adds: “We speak to many OEM manufacturers and we’ve seen seismic growth in affinity sales when coupled with active dealer marketing and a committed network. More and more OEMs are seeking new sales channels and competitive advantage, particularly as a wave of new brands intensifies competition. This could be for legacy brands looking to revitalise their channels or for new market entrants aiming to make a quick impact.”

The Takeaway

In a market where TCO pressures, tax changes, and recruitment challenges are reshaping priorities, affinity schemes offer something rare: a single solution that benefits every stakeholder. They reduce cost, strengthen engagement, protect brands, and build long-term value.

This is why affinity needs to be part of every OEM’s toolkit. For Fleet Directors and Sales Directors, it offers a way to retain or even grow annual sales volumes - while improving the quality of business. Affinity channels protect brand equity, stabilise residual values, and mitigate portfolio risk, delivering a more sustainable foundation for growth.

It’s not just an alternative to existing programmes - it’s an extra sales angle that can unlock volume, value, and advocacy across every level of the business.

Salary sacrifice may have defined the past few years of employee mobility. Affinity will define the next.