Cycle to work scheme - any point?

You don't buy the bike after the initial term, you do the token payment for extended hire with no further monthly fees option instead.

The result is a bike at either 20% or 40% discount depending on your tax band. The 'fair market value' bit is irrelevant as you won't take that option.

Oh and I also timed it to hit the end of year sales of previous years bikes, so I got a bike that was already discounted 20% too!
 
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Well I'm not happy with the scheme.
I had it over 12 months then paid around £58 for an extended 3 years.
I effectively own the bike (Forme Longcliffe) and I don't owe any more money but I can't sell it until about July 2016 so it's sitting in my shed.

I nearly bought one of my other bikes on the scheme in January 2014 but did the maths and I was only saving around £60 on an £800 bike.
This was because they knocked £100 off if I paid cash so I paid upfront.
 
Either way, I have cancelled out the scheme now. I would have saved money only by hiring for 4+ years instead of buying the bike.

However I would have lost out on £50 as I would need to hire a bike soon for 2 days. I should also be able to get some discount if paying with debit card in one lump sum I expect.
 
Here you go -

endofhirea.jpg


I did ring them to confirm that I couldn't sell it.
They said I could sell it if I paid the higher buy out fee.
 
Guest2 said:
Either way, I have cancelled out the scheme now. I would have saved money only by hiring for 4+ years instead of buying the bike.
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How do you work that out? You stop paying for it at the end of the initial term which is usually 12 (or in my case 18) months?

Whatever option you choose, you don't pay anything more once that term is over. Where did 4 years come from?
 
I cycle to and from each day,This Cycle to work schemes T&C looks pathetic,Whats the point in it..might as well go and just buy a bike like i did then its yours forever..nobody telling you if you can sell it or not,No monthly crap.
 
Nevakonaza said:
I cycle to and from each day,This Cycle to work schemes T&C looks pathetic,Whats the point in it..might as well go and just buy a bike like i did then its yours forever..nobody telling you if you can sell it or not,No monthly crap.
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It worked out ok for me (see earlier post).

And I sold one of the bikes I got on the scheme within 3 months (couldn't get on with drops bars) and ended up making money.
 
Skeeter said:
How do you work that out? You stop paying for it at the end of the initial term which is usually 12 (or in my case 18) months?

Whatever option you choose, you don't pay anything more once that term is over. Where did 4 years come from?
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On a £1000 voucher (which I actually have to put £100 towards at Planet X as Cycle Scheme take 10%)
Payments of £83.33 a month, so £66.66 a month after 20% tax = £800 for the year. Then add on the 25% plus 20% VAT = £300 after 12 months of usage. Meaning I would have had to pay £1200 total for a £1000 bike

£900 (£100 + £1000 voucher for a £1000 bike + £800 for the year for the hire) + 7% = 963, £975.60 with the VAT on top of fair market rate

To me that's rubbish and should only be done if you are in the 40% / 50% tax bracket or cannot afford to buy outright


Age of Cycle
Acceptable disposal
Value as a percentage of original price
Original price of the cycle less than £500
Original price of the cycle more than £500
1 year 18% 25%
18 months 16% 21%
2 years 13% 17%
3 years 8% 12%
4 years 3% 7%
5 years Negligible 2%
6 years & over Negligible Negligible

https://www.gov.uk/government/uploa.../file/63929/cycle-to-work-guidance-update.pdf
 
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Firstly don't even look at the purchase option, its pointless. Only look at the extended hire option.

Second, do you need to spend £1k? I got a £600 bike and a bunch of kit for just under £500 in the sale so I was in the lower band and only paid 3% extended hire fee.

And thirdly, what's the £100 for? Sounds like a con. My scheme didn't have any extra fees in top?

My £600 bike cost me £418 over 18 months. Its not meant to be a money making scheme, its meant to be a scheme a bit better than 0% finance.
 
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Did you not say you are saving 1k a month in some thread? Just buy the bike outright and be done with it. You're putting way to much thought into this.

Use the scheme or just buy the bike, don't over think it.
 
I would prefer the bike to be mine, what if I want to sell it on?
No, I actually want to spend £1500 but the voucher only allows up to £1000 (unless there is a certain license that financial service companies have that allows a much bigger voucher amount. Other companies can apply for this license)

Cycle-Scheme didn't make £4million of profit last year for no reason!...

http://www.planetx.co.uk/cycle-scheme

An admin fee of 10% applies with cyclescheme.co.uk, On Your Bike and Bike2work vouchers, as well as Salary Extras. A 12% fee applies with Cycle Plus vouchers and a 12.5% fee applies with the NHS SME HCI scheme.

We keep our prices competitive by selling at very low margins. All of these third-party organisations charge us a fee on each bike we supply to a customer for administering the scheme on behalf of your employer. We pass this exact charge on to you without adding anything extra ourselves because our pricing is too low to absorb it. The additional charge DOES NOT APPLY if an employer is paying us directly for the bike.
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