Getting a deal through cycle to work

Pict
Pict Posts: 108
edited September 2007 in MTB general
Any netizen out there got there bike through the cycle to work scheme?
I'm out and about today looking for a bike. I take it one an still haggle the price, same as buying normally??
Come back with your bike or upon it.

Comments

  • i am afraid there probably isn't a shop in the land that woould allow you to haggle on a ctw scheme. as the deal is brought out to you throught the government not from shop to the workplace. don't you think that 40% off the rrp is enough of a deal in the first place?
    internet (in ter net), secret sanctuary of idiots and nutters.
  • stu8975
    stu8975 Posts: 1,334
    depands if your friendly enough.. :wink: , my girlfriend got one on the ctws, 42% discount + 15% discount cos the peeps and my LBS are good mates of mine and thats the discount i ususlly receive, you can but try.
  • supersonic
    supersonic Posts: 82,708
    Usually you buy at RRP with this scheme.
  • tom_j
    tom_j Posts: 66
    i bought a bike that was 'last year', the RRP was £1045.00 but the shop had it on offer for £850.00, i paid £900 for it on CTW as they make less money on CTW.

    Still got it for about £570 tho in the end!
  • Bromski
    Bromski Posts: 239
    Can you get any bike on the scheme?

    Do I need to explain to anyone that I need a Trek Fuel EX 9 to cope with the cycle tracks on my 17 minute commute - a £180 hybrid just won't cope.....?
  • tom_j
    tom_j Posts: 66
    go look at the website and it will tell you everything you need to know. basically you can have up to £1000, after that your workplace needs to buy a special license for about £200-300 and then they can offer you more (or something like that)
  • Pict
    Pict Posts: 108
    I'm I right in thinking that public sector workers don't get such a big saving, as those in the private sector? ?30% compared to 40%.
    I get the impression that it's what ever the LBS quotes as a price is the, price one pays. Not necessarily the RRP. After all the 08 models are starting to trickle into the shops, and logically the 07 prices should start to plummet( one hopes).
    I'm going to do the deal o Monday, I got a fine deal on my last bike so fingers crossed.
    Come back with your bike or upon it.
  • Picked my bike up on Friday on the cycle 2 work scheme.
    If you are using the cycle2work scheme then you can only get the bike through Halfords, as it there own thing. If however you are using the the 'Cycle Scheme' then you can get a bike form any shop that is taking part.

    If you have to get a bike through Halfords, they can get in any bike you want, but you will have to pay the full RRP for it, if you go to the store and they have a reduced 2007 bike, then you can pick up that discount.

    Most local bike shops will maybe chuck in a helmet or such like to secure the sale, cause as far as they care they voucher you give them is pretty much cash in there tills for the day.
    ....DaZeD aNd CoNfUsEd....
  • nothing to do with Halfords unless your company scheme is with halfords - depends who your company is running their scheme with - mine was with Halfords and I chose a Scott Sportster.
    Discount has nothing to do with public or private sector but in what tax bracket you are, very basically money is lent to you interest free and you pay it back at source i.e priot to tax and Ni
  • Pict
    Pict Posts: 108
    My scheme is" cycle to work, "and I can use LBSs. Funnily enough Hellfrauds is not listed as participating in the scheme in my area.Come what may it's too good to refuse.
    Ride free citizens!
    Come back with your bike or upon it.
  • Pict - the way the Cycle to Work scheme is set up will depend on your employer. Some employers simply buy into schemes set up by Hellfrauds etc. whereas others run the scheme themselves (the employer saves more money that way) and allow you to go to any local bike shop you fancy and get the best deal you can. It sounds like your employer is in the latter category.

    What happens on the ground is that you find the bike you want, negotiate a deal with the LBS, and then your employer will pay the price you negotiated so the LBS gets all the money. Your employer then owns the bike and will be able to claim the VAT back probably and may pass this saving onto you (though it may not). So if the bike costs £1175 then after the VAT reclaim it cost £1000. The employer then lends you the bike and deducts say £33.33 per month offyour salary for 30 months (salary sacrifice). If you pay tax and NI at the basic rate you are effectively saving £11.11 a week of that £33 (if you pay at the higher rate it is more like £14 per week). At the end of the 30 months the employer MAY (they aren't allowed to say WILL) sell you the bike for a nominal amount - usually 3 to 5% of bikes new cost so say £30 + VAT. Therefore your £1175 bike will have cost you £1000 - (30 x £11.11) + £35.25 = £701.95, a saving of £473.05 or 40%. If you are a higher rate taxpayer you will have paid £1000 - (30 x £13.67) + 35.25 = £625.15, a saving of £549.85 or 47%. The rich get richer....
    Commencal Meta 5.5.1
    Scott CR1
  • me-109
    me-109 Posts: 1,915
    Yep, it works pretty much as Father Faff just said, except it may be that the employer takes the money back from you over a shorter period than the loan agreement. The cycle is loaned to you over a three year period - it is capitalised as an asset over that period - so that at the end of the three years the retained value is minimal. They are likely to take the money back over a 12 to 18 month period as the capital values are small and it is better for them to reduce the management overhead of the scheme.

    At the end of the three-year loan period you have an option of transferring the asset into your name or of relinquishing the asset back to the company. This comes at a price, typically 5% to 10% of the original value. Who and how the bike would be collected if you don't want it I'm not sure.

    Again, in terms of value most schemes allow up to £1000, but there is nothing to prevent you spending more than that. It is just that the additional value will not be included in the incentive scheme. Also any additional value may be lost if you relinquish the bike at a later date. You have to keep the bike in working order, note to any insurers that the employer has a stake in the asset and use it at least 50% of the time on company business or for commuting. No evidence is required to back this use up, however.

    Two bikes may be purchased only where there is a need, such as cycling to one train station and then one for the station at the other end to work. The value has to be split between them.

    In my case I bought an 06 Marin Rift Zone at a discounted price, added some bits, got a £1000 voucher from the scheme and paid the difference out of my own pocket. I reckon I'm paying about £50 per month after deductions for 12 months for that. With £50 to £100 to pay in three years time, I reckon that's a deal worth doing.

    I've even used it for work and been able to claim 20p per mile for doing so.
  • Just to correct a couple of points there. The £1000 maximum is set by your employer not by the government - there is no limit on the value of the bike placed by the government and employers can set whatever limit they want. You can also have as many bikes as you like, the only requirement being that you use them "mainly to cycle to/from work" but as you say no one actually checks. I have two £1500 bikes through the cycle to work scheme - an MTB for when I want to go across the moor or on canal towpath and a roadbike for when I've got to go quicker on road.
    Commencal Meta 5.5.1
    Scott CR1
  • alfablue
    alfablue Posts: 8,497
    edited September 2007
    3 points:

    1) Question of public versus private sector.

    My University (and employers like NHS etc) can't claim back the VAT which should in companies that can do this, unless the company is "crooked", be passed back to the employee to enhance their saving.

    2) Spending over the £1000

    There are two issues, the employer would need an enhanced consumer credit licence to exceed the £1000 limit - companies that have previously done the computer loan / purchase scheme will probably have one, or one can be purchased for a few hundred quid. In respect of topping up, however, this year most scheme organisers have drawn back from this saying that the limit cannot be topped up by the employee because this places the ownership of the bike in part in the hands of the employee, whereas it must be wholly owned by the employer during the scheme. I think the limit is effectively £1000 (including essential accessories) for most scheme participants at the moment.

    3) Mileage allowance

    My employer (and I would guess most others) do not allow you to claim the 20p per mile allowance whilst you get a bike under the scheme - it would be like providing you with a car and fuel and still paying mileage, however, in my view this is still a bit tight fisted as I have to provide my own fuel for the bike (cakes etc) at my own cost AND I am paying a rental fee for the bike, so its more like renting a car from work, and paying fuel costs - I think the incentives should be greater to really encourage cyclecommuting. I am not sure if the rules explicitly rule on this however.

    It used to nark me a bit a few years back where I got 12p per mile AND paid tax on this at the end of the year - the new tax-free 20p allowance is slightly better.

    For my own journey, 30 mile round trip base to main campus for teaching, I would get £12 allowance for driving, £6 for cycling on my own bike, and £0 if I used a cyclescheme bike. (Of course if my base was 30 mile round trip from home I would get no allowance anyway, its only for travel from my base)
  • All the above is prteey much correct. However it does make a difference if you're in the public sector. You don't get to save the VAT. I work for the Dept of Health and couldn't save VAT. You still save 33% from the price though. Check out the calculator at www.cyclescheme.co.uk
  • HarryB
    HarryB Posts: 197
    This scheme seems a great idea but why don't more companies and especially councils promote it and offer it to staff. I work for a large count council (Durham County Council) and they don't do the scheme. Anyone know how I can get them to take part?
    I'm buying a Pinarello next spring so it would be great to save a load of dosh
  • Yeah speak to your HR department or such like and suggest it to them, or put a Office e-mail around and see how many people would be interested in it before you put the idea forward?

    I managed to get my company involved this year and its been great. I would advise looking at the Cycle Scheme not the cycle2work one, which is the Halfords run one.

    If you go on the web site there is a form that you can fill in and they send your employer details.
    ....DaZeD aNd CoNfUsEd....
  • I run a company so got to see both sides!
    Little bit of work involved but fairly straightforward.

    Just remember that while you save up to 50%, your company only saves on the VAT.

    Mine was CycleScheme (based in Bath) and they were very good indeed.
    Two Stumpjumpers, a Rockhopper Disk and an old British Eagle.

    http://www.cornwallmtb.kk5.org
  • alfablue
    alfablue Posts: 8,497
    Matteeboy

    Your company saves NI contributions, I don't see why for one minute you should save the VAT rather than the employee - it is a scheme to encourage employees to cycle to work. No way will any employee save 50% unless they get the VAT, and only then if they are a higher tax payer.

    For me, my saving will be only 23% because my Uni can't claim VAT back an I am a lower rate tax payer. The £187 I would save on a £1000 bike (and then less as I lose mileage allowance) makes the deal very borderline, even more so when discounts are unavailable under the scheme at most shops.

    Don't be tight - give your employees the VAT - as intended and implicit in the Cyclescheme details - otherwise be prepared to be considered a rogue employer, in my book!
  • Errrrmm - Alfablue - As a Director, I am both the employer and employee - only other employee is my wife (also a director) - we use freelancers for anything else so not taking anything from anyone!
    One of the many joys of running your own show.
    Two Stumpjumpers, a Rockhopper Disk and an old British Eagle.

    http://www.cornwallmtb.kk5.org
  • alfablue
    alfablue Posts: 8,497
    fine, you aren't diddling anyone else, just your assertion in the post above was incorrect.
  • Pict
    Pict Posts: 108
    Is it true that the bike shop doesn't make the same profit margins through bikes sold on the cycle to work scheme?
    I was in today and the chap wouldn't budge on the RRP. But if I was paying cash, I would have got a £750 bike down to £600.
    Come back with your bike or upon it.
  • alfablue
    alfablue Posts: 8,497
    Cyclescheme charge 10% to the shop, so I would expect some leeway on the price (they need to cover the £75, but could potentially sell for £675). Maybe there is also reluctance because they get a voucher not cash, maybe (can only be a little bit) a bit more hassle. What I'm not sure of, is if they pay the comission on the sale price or the RRP, I would have thought the former, in which case the comission on selling it at £675 would be less.

    Spa Cycles quoted me a 12.5% surcharge on a Dawes Galaxy Ultra bought through the scheme. Their standard prices are very good, so I suppose it's fair enough, but I am not sure why they want 12.5 rather than the 10% they get charged - perhaps they assume we're not going to quibble too much as we're not paying up front - shame though because in my case it was a deal breaker as it pushed the price over the £1000 limit.