Cycle to Work - End of hire period advice.

Deadslow

Long time lurker here finally brave enough to post for first time! I’m seeking advice regarding end of hire period on C2Work scheme (first time for me.) Bike is Raleigh SF1.0 flat bar road bike (cost £400 new) which I’ve used almost daily for the last year so has fairly high mileage (~7800 miles). Options now are hand bike back to Cyclescheme, pay £14 then extend hire period for further 3 years or pay £89 and the bike is mine. However, I took the bike to LBS for evaluation of work needed to get it ready for winter (if I keep it). It seems like I need to spend £200+ (new wheels, chain, chainwheels, cassette, also maybe BB ) to prepare it for winter. Recommendation from LBS is to return bike to Cyclescheme. My gut feeling is that I should return it and buy another bike on the scheme at a similar price and accept that at the end of each year of the bike to work scheme I will basically return the bike for scrapping – seems a bit wasteful and not environmentally friendly but the only sensible way to ensure I have a reliable bike throughout the next year. Also spending >£200 on a £400 bike doesn't really seem sensible (to me anyway). Is my logic correct or badly flawed? Is this how most people use the cycle to work scheme?

SickAsAParrot

You would have to pay the cost of returning the bike to Cyclescheme so it would probably be better to just pay the £14, forget about it or use it for bits, and then get a new one on a new scheme.

Mine ended last month but I'd only done 1000 miles and it was in pretty good nick (only crashed twice!!), I still just paid the 3 year extension because ultimately it saves the most money.

Yorkshirecoal

I dont know if we used the same scheme as you but this is the e-mail I got from our finance department for the end of term agreement:

This year HMRC have introduced new rules for the buy back of the cycles at the end of the “lease” period. They consider the provision of cycles under the Cycle2 work scheme as a taxable benefit and therefore are seeking a higher buy back figure than the previous 5%.
Their proposals were:-

To have each cycle individually valued.
Cycles valued at £500 or less – buy-back amount to be 18% + vat
Cycles valued over £500 – buy-back amount to be 25% + vat

The decision by the Force, which will satisfy HMRC requirements and provide equity with the previous scheme, is that the cycles can be purchased at 5% of LOC value + VAT, and the difference between either the 18% or 25% of LOC is reported as a taxable benefit at year end, April 2012. This means you will have your tax code adjusted in the following year to take account of the taxable benefit. This will be £34 at basic rate tax, or £68 at the higher rate.

The options available to you are:
1. To purchase the bicycle and/ or cycling safety equipment at a cost of £51

I took a agreement out of £850. I could have returned the bike for free and it would have just been sold at auction apparently. If you do pay the £14 what will your company charge you in 3 years?? or what will the HMRC charge more likely, remember the bike is still technically theirs so using it for parts could be dangerous if you want to give it back in 3 years.

pdw

I'd pay the £14 then, depending on whether you want a new bike or not, either pay to get it fixed or get a new bike.

The shopping list from the bike shop sounds about right given the mileage, although I wonder about the wheels. What's wrong with them?

If the drivetrain is not actively giving you problems (jumping gears, grinding BB) I'd be inclined to change it after winter.

If you decide to go for a new bike, then the best thing to do is to break the old bike for spares and sell on ebay (of course, the bike won't be yours to sell until the end of the extended hire period... )

Bear in mind that the savings you'll see on C2W will be worse next year, as the rental payments are becoming VATable.

Deadslow

Thanks for the replies guys.
I forgot that returning the bike to cyclescheme would incur postage costs (~ £20-£30?) so on reflection paying the £14 and keeping the bike for a further 3 years is looking a better option. From the documentation I received from cyclescheme there will be no further payment at the end of the 3 years either.

The shopping list from the bike shop sounds about right given the mileage, although I wonder about the wheels. What's wrong with them?

If the drivetrain is not actively giving you problems (jumping gears, grinding BB) I'd be inclined to change it after winter.

Wheels are cheap Rigida Nova and are virtually down to the wear line so really need replacing. BB isn't grinding so should last a bit longer but gears jump occasionally particularly when hitting potholes so replacement parts are needed sooner rather than later - there's no way I could get through the winter with the current set-up.

This is my first year commuting to work and I guess I didn't realise how frequently I would have to replace parts and the cost involved in doing so

bails87

You have to pay to send the bike back to Cyclescheme?! Surely you return it to your company and they return it Cyclescheme?

pdw

You are doing a fair mileage there.

If you think £200 is a lot for 8k miles, just remember what it would cost in petrol...

Are you doing the maintenance yourself? The few tools you need will pay for themselves very quickly.

I'm a bit surprised that you've worn the rims in 8k miles, but I guess it depends on how much you have to use your brakes. Might be worth looking at disc brakes as discs are much cheaper and easier to replace than rims.

graeme_s-2

When I had my bike on cyclescheme (before all the recent revisions), at the end of the hire period I could chose to keep it, or pay a scrappage fee. To buy it, my employer wanted one extra monthly payment, to scrap it, they wanted the same. So although the buy-back fee has changed now, I wouldn't be surprised if the scrappage fee is still an additional 1 month payment.

bails87

Graeme_S wrote:

When I had my bike on cyclescheme (before all the recent revisions), at the end of the hire period I could chose to keep it, or pay a scrappage fee. To buy it, my employer wanted one extra monthly payment, to scrap it, they wanted the same. So although the buy-back fee has changed now, I wouldn't be surprised if the scrappage fee is still an additional 1 month payment.

But it's not your bike. It's their bike, it's up to them to scrap/sell it, unless you want to buy it off them.

Maybe you're right, but it just sounds like the company trying to get some money when they shouldn't to me.

graeme_s-2

bails87 wrote:

Maybe you're right, but it just sounds like the company trying to get some money when they shouldn't to me.

When you put it like that, it does sound like a bit of a swindle. I'm fairly sure my employer would have just been following Cyclescheme's advice, as they run our scheme.

Torvid

are you sure you need all that work doing after just 8k miles, cassette, chain and new tyres i would say fair enough but wheels? unless there buckeled you shouldn't have impacted the breaking surface much and if you have gett softer break pads there cheaper to replace every 4k miles than wheels every 8k.

I would take te bike somewhere else first and get a second opinion.

ex-pat scot

The "admin charge" to return my bike at the end of the hire period is exactly the same as the amount to buy the bike off them.

t4tomo

ex-pat scot wrote:

The "admin charge" to return my bike at the end of the hire period is exactly the same as the amount to buy the bike off them.

Thats not a surprise, no company wants a load of second habnd bikes to sell or scrap hence the scheme is set up such that you are encouraged to take ownership of the bike when offered it at the end of the scheme.

Deadslow

You have to pay to send the bike back to Cyclescheme?! Surely you return it to your company and they return it Cyclescheme?

The e-mail I received from cyclescheme;

We hope you have benefited from the use of the cycle and safety equipment loaned to you by your employer during the hire period. Your employer has transferred ownership of the equipment to Cyclescheme to enable us to facilitate your end of hire options in line with HMRC’s updated guidance.
________________________________________
You now have 3 options:
1. Under a separate agreement with Cyclescheme, you pay a small, one-off refundable deposit (3% or 7% including VAT of the equipment value*) and continue to use the bicycle for up to 3 years. The monthly payments are zero. At the end of this period, Cyclescheme refund the deposit if you do not wish to keep the equipment.
 This option will cost you £14.22.

2. Take ownership of the equipment by paying Cyclescheme a much higher valuation (e.g., for a one year old bicycle this would be 18% or 25%* of the certificate value in accordance with HMRC requirements).
 This option will cost you £85.29.

3. Return the bicycle to Cyclescheme, at your own cost.

As noted previously I guess returning bike at own cost encourages the hirer to retain the bike rather than return it for scrapping.

Deadslow

If you think £200 is a lot for 8k miles, just remember what it would cost in petrol...

Couldn't agree with you more about this

Are you doing the maintenance yourself? The few tools you need will pay for themselves very quickly

Clueless with tools - I just ride the bike wouldn't have any idea about maintenance. Guess I need to consider some tuition?

are you sure you need all that work doing after just 8k miles, cassette, chain and new tyres i would say fair enough but wheels? unless there buckeled you shouldn't have impacted the breaking surface much and if you have gett softer break pads there cheaper to replace every 4k miles than wheels every 8k.

I've already replaced the chain twice, had a new casette fitted and I'm now on my 4th set of tyres and brake pads. Is this normal or maybe it is down to cheaper components fitted to the bike?
Back wheel is already slightly buckled due to hitting large pot hole - seems to have high spot when its spinning. Not sure about hardness of the brake blocks I buy - I just go to the LBS and buy whatever he recommends.

dhope

Deadslow wrote:

3. Return the bicycle to Cyclescheme, at your own cost.[/b][/i]

As noted previously I guess returning bike at own cost encourages the hirer to retain the bike rather than return it for scrapping.

Would be really tempted to tell them that you've arranged for the return of the bike to them and would they confirm when it's received. Do nothing, wait a week, ask if they've received it. Only as a curiosity to see how wiling they are just to get the thing off their books

thefilbertfox

What happens if you lose or have the bike stolen during the extended hire period?
I assume nothing since you have finished paying the monthly loan.

bails87

thefilbertfox wrote:

What happens if you lose or have the bike stolen during the extended hire period?
I assume nothing since you have finished paying the monthly loan.

You owe them a bike, the same as if it was during the first 12 months.

ooermissus

>You now have 3 options: 1. Under a separate agreement with Cyclescheme, you pay a small, one-off refundable deposit (3% or 7% including VAT of the equipment value*) and continue to use the bicycle for up to 3 years. The monthly payments are zero. At the end of this period, Cyclescheme refund the deposit if you do not wish to keep the equipment.
 This option will cost you £14.22.

How come it's your responsibility to pay for repairs when the bike is owned by Cycleshcheme? (I know this displays my ignorance of how the scheme works...)

mcj78

bails87 wrote:

thefilbertfox wrote:

What happens if you lose or have the bike stolen during the extended hire period?
I assume nothing since you have finished paying the monthly loan.

You owe them a bike, the same as if it was during the first 12 months.

This happened to me & luckily my employers wrote it off, as the overall cost of the bike had been covered in the 1st 12 months of the scheme - make sure it's insured though, just in case the worst happens & they want you to replace it.
J

notsoblue

I'd just extend the hire period for 3 years, £14 is a fair price even if you just keep it for parts. Then you can hire a new bike for the winter and have a spare. Theres no benefit to paying to transfer the ownership of the old bike unless you were planning to sell the bike on.

Deadslow

Thanks for all the interesting responses. So, the consensus of opinions seems to be in order of preference;

1. Pay £14 and extend hire period, hire new bike for winter. Maybe pay for repair of current bike (SF1.0) in spring for use in summer/spare. (Interestingly, hidden cost here is current bike (SF1.0) must be insured to avoid paying Cyclescheme if bike gets stolen in 3yr extended period. I need to investigate this.)
2. Return to Cyclescheme; pay postage (roughly £20). Get new bike for winter - no spare bike.
3. Pay £85 to take ownership then sell on - bike probably not worth £85 at the moment due to worn out components so not viable.

pdw

Deadslow wrote:

Thanks for all the interesting responses. So, the consensus of opinions seems to be in order of preference;

1. Pay £14 and extend hire period, hire new bike for winter. Maybe pay for repair of current bike (SF1.0) in spring for use in summer/spare. (Interestingly, hidden cost here is current bike (SF1.0) must be insured to avoid paying Cyclescheme if bike gets stolen in 3yr extended period. I need to investigate this.)
2. Return to Cyclescheme; pay postage (roughly £20). Get new bike for winter - no spare bike.
3. Pay £85 to take ownership then sell on - bike probably not worth £85 at the moment due to worn out components so not viable.

On paper, that's correct. In practice, if you do (1) there's no way that Cyclescheme would ever know if the bike got stolen, so I wouldn't bother with insurance unless you want it.

I've already replaced the chain twice, had a new casette fitted and I'm now on my 4th set of tyres and brake pads. Is this normal or maybe it is down to cheaper components fitted to the bike?

That sounds like a lot. My previous commuter did 9 miles/day every day for 7 years in all weather, so something like 14k miles. I'm pretty sure it had one new chain, cassette and chainring in that time and it wasn't new to start with. The rims probably were overdue for replacement by the end, but I never did change them. This bike was always maintained with Shimano's cheapest, so that shouldn't be the issue.

My current bike is on 2.5k miles and is showing absolutely no signs of wear.

Are you replacing stuff because it's causing problems, or because the bike shop tells you it needs doing?

Deadslow

Are you replacing stuff because it's causing problems, or because the bike shop tells you it needs doing?

Being mechanically useless I have been reliant on the advice of the LBS so I've changed the chains at ~ 2.5k miles and cassette at 5k miles - sounds like this was maybe premature based on your experiences. Chainring is still the original but small ring is worn -chain jumps on this sometimes, bigger ring is not as bad. Current chain has almost 3k miles on it.

Regarding tyres; first set were Kenda only got 900 miles out of them - got too many punctures with these (probably had one per day at one point!) Then switched to Michelin Erylium got 2k miles out of these. Since then used Specialized armadillos got 3k miles and no punctures from last set Current tyres have about 1.9k miles on them.

I guess with this being my first year commuting I really didn't have any idea how often I need to change out components. :? [/quote]

rolf_f

pdw wrote:

That sounds like a lot. My previous commuter did 9 miles/day every day for 7 years in all weather, so something like 14k miles. I'm pretty sure it had one new chain, cassette and chainring in that time and it wasn't new to start with. The rims probably were overdue for replacement by the end, but I never did change them. This bike was always maintained with Shimano's cheapest, so that shouldn't be the issue.

14,000 miles for one chain replacement sounds like a lot of mileage for one chain unless it was maybe 7 or 8 speed.

My old Dawes probably managed 7000 miles on its original chain but that is 7 speed and I doubt that a 9 or 10 speed would last as long. However, rotating say 3 sets of chains at between 500 and 1000 mile intervals has to be better than waiting for 2500 miles and then changing.

pdw

It was 8 speed, although it was horribly unloved. I don't think it was cleaned once in that time

The current bike is 10 speed. I've just measured my current chain. It's on 0.5% stretch after 2.5k miles. If I wanted to preserve the cassette, I'd probably change at 0.75% which is hopefully a good 1000 miles away. If I changed it now, i'd hope the cassette would see out at least 3 chains.

neilvx

So after reading all that can you extend the hire for a further 3 years and then hire a new bike at the same time ?

Doesnt that mean you will have 2 bikes on hire "confussed lol"

Deadslow

So after reading all that can you extend the hire for a further 3 years and then hire a new bike at the same time ?

Doesnt that mean you will have 2 bikes on hire "confussed lol"

In my case, I have now finished the one year hire period with my employer for my current C2W bike. Having completed the 12 payments my employer has transferred ownership of the current bike to Cyclescheme. Cyclescheme have offered the option to hire this bike for a further 3 years from them for £14. However I can also get a new bike on the C2W scheme run by my employer, which will involve another one year hire period with them. Does this make sense?
[/quote]

neilvx

Yes