Bike Leasing
Comments
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Fursty Ferret wrote:I second that, Paul. You make a pretty persuasive case and thanks for taking time time to address the queries in a polite and comprehensive fashion.
I have to say that my own concerns relate to basic things like wear and tear. If I ride a bike, premium or otherwise, for two years then there will, without a doubt, be some cosmetic damage at the end of that time period (scratches, the odd dent etc). I would also suspect that, depending upon circumstances, the cassette and chain might also be a little worse for wear. Presumably there would be some sort of contractual obligations to address these matters prior to giving the bike back?
Personally, I'm more inclined to want to own something outright because of the naked fear of being stung badly if I were to damage something that, at the end of the day, belongs to someone else. But I havent completely dismissed the idea of leasing (the only problem is that you don't have quitewhat I'm looking for in my price range...)
Hello Fursty Ferret (that's my favourite Badger beer as well by the way
)
Thank you for your comments.
You have raised an excellent point about wear and tear. There is no sting in the tail at the end of the lease.
In a nutshell, we ask that the bike comes back fit for purpose. That means that we ask for it to come back as a functioning bicycle that someone would feel safe riding.
Cosmetic damage is not a problem. Some bikes will have more scrapes than others. We accept that as part of what we are doing. We genuinely want cyclists to enjoy these bikes. If they come back unmarked then that would indicate that they had not been enjoyed to the fullest capacity, which would be a shame.
We are totally different to a car leasing company. We do not have a range of punitive "fines" for different types of damage. If a chainset is functional at the end of a lease then that is fine with us.
Please remember that if a part wears out or fails at any point, it will either be covered by warranty or can be replaced at trade prices plus VAT.
Also, if you had chosen to buy the bike from the outset, you would still need to replace any disfunctional chainset and it would likely be more expensive for you to replace. You would have paid substantially more for the bike as well.
We are 100% focused upon helping cyclists to enjoy premium bikes whilst making every aspect of this as cost effective as possible.
We know that we shall be successful if we achieve this. We know that we shall not be successful if we adopt a punitive approach.
Naturally, we choose to be successful so we shall ensure that none of our customers recieves a "sting" at the end of the lease.
Sections 5c and 5d of our Terms and Conditions set out the specifics you need to be aware of:
5c) Please ensure that the Equipment is returned in a saleable condition. That means that it needs to be in one piece (i.e. not broken), and with functioning parts or components so that they can still do the job they were designed for (for example, brake pads should have adequate life left in them so they still stop the bike). We accept that there will be some wear and tear like scratches and scrapes.
5d) We consider something to be in a non saleable condition if it comes back to Us with breakages, buckling, tears, splits, bends, gouges, rips, kinks, holes, leaks, cracks and large dents. This will normally involve replacing the Equipment under a crash replacement policy, unless it can be safely repaired. We commit to ensuring that only trade prices are applied to any crash replacement or repairs.
Please remember that bikes are leased with an accidental damage insurance policy so anything significant can easily be replaced or repaired with minimal drama.
I hope that this has addressed your concerns.
Please feel free to get in touch with us directly via the website if you'd like to discuss any specific brands that you are keen to lease. We are adding new brands all the time to the system.
Best regards
Paul0 -
Simple rule of thumb - if someone can make a workable business out of leasing, loaning, renting something to you, then you are paying more than you will pay than if you buy it yourself, assuming you have the cash. Money is not created by virtue of a leasing agreement unless you can claim a tax benefit in some way.
The big 'if' is whether you have the cash. Then the real question is not how much the lease will be, but whether you should save up and buy for cash. If you cannot save up the cash, then you will not be able to afford the lease payments s the leesor is not going to lose money so you can have nice things earlier than you could save the money.0 -
Hello tiredofwhiners,
You've raised a couple of points during the course of this forum that I am sure others will have a view on.
However, here is my response to each. First:No such thing - anyone who thinks that a 0% finance deal actually exists is kidding themselves. You're paying for it in the price, before they add the finance on.
Perception in everything. If a price is presented to a customer, and they are given a means of paying for that product over a period of 24 months and they pay no more than the original price, then they are receiving 0% finance.
Please rest assured that manufacturers and distributors do not work out a price that takes 0% finance commissions into account. Naturally, there is always a risk associated with lending someone money and financial institutions will try to get someone to take on that risk. In the case of 0% finance, it is the retailer who absorbs that cost. They do not pass it onto the customer, they simply sacrifce their margins in the hope that offering a 0% finance deal will enable them to sell more bikes, and in so doing be in a stronger position to negotiate better rates with their suppliers, thus reducing the impact of their margin sacrifice.
This is simply the economy of the industry. There is no conspiracy of price fixing that works backwards from the RRP. Rather, it goes the other way and each part of the chain add their own margin into the equation.
This brings me nicely onto your other point:tiredofwhiners wrote:Simple rule of thumb - if someone can make a workable business out of leasing, loaning, renting something to you, then you are paying more than you will pay than if you buy it yourself, assuming you have the cash. Money is not created by virtue of a leasing agreement unless you can claim a tax benefit in some way.
The big 'if' is whether you have the cash. Then the real question is not how much the lease will be, but whether you should save up and buy for cash. If you cannot save up the cash, then you will not be able to afford the lease payments s the leesor is not going to lose money so you can have nice things earlier than you could save the money.
A critical component of the equation is missing from your statement. That is, a regular consumer is not able to purchase a single bicycle from a manufacturer or distributor at trade rates. We are able to purchase bicycles at trade prices. We pass on our savings to our customers during the lease. It's as straightforward as that.
Remember, we also offer the lump sum lease option to counter the "cash purchase" equation. Our Price Match Guarantee ensures that our customers pay the best price possible.
Finally, I have mentioned in a previous post that we advocate that our customers do save up to be able to afford their bike. We take responsible steps to ensure that it is affordable. We further give our customers a means to leverage our relationships with the suppliers of these bikes to get their hands on it in the most cost effective way possible.
I hope that I have given you another point of view to consider.
I look forward to hearing from you.
Best regards
Paul0 -
tiredofwhiners wrote:Simple rule of thumb - if someone can make a workable business out of leasing, loaning, renting something to you, then you are paying more than you will pay than if you buy it yourself, assuming you have the cash. Money is not created by virtue of a leasing agreement unless you can claim a tax benefit in some way.
The big 'if' is whether you have the cash. Then the real question is not how much the lease will be, but whether you should save up and buy for cash. If you cannot save up the cash, then you will not be able to afford the lease payments s the leesor is not going to lose money so you can have nice things earlier than you could save the money.
It's not as simple as that. I have the cash to buy a very expensive bike. But I also like having a functioning cash-flow. If something is a bit more expensive through leasing over the longer term, then other benefits accrue in other ways. If I was to buy a 4K De Rosa with cash, which I could do, it would then deprive me of a large chunk of what I have in cash terms at the moment and stop me doing other things I would like to do (honeymoon, house repairs etc, which all need paying for this year). Leasing would provide me with a certain flexibility, and flexibility is an asset in itself, which I don't necessarily mind paying for.
Paul, I'll think a bit more about this and may drop you a line.0 -
Paul
Thanks for the reply. Very interested in seeing how things go with Legend and I will indeed keep an eye out.
Best regards,
Duncan0 -
Fursty Ferret wrote:tiredofwhiners wrote:Simple rule of thumb - if someone can make a workable business out of leasing, loaning, renting something to you, then you are paying more than you will pay than if you buy it yourself, assuming you have the cash. Money is not created by virtue of a leasing agreement unless you can claim a tax benefit in some way.
The big 'if' is whether you have the cash. Then the real question is not how much the lease will be, but whether you should save up and buy for cash. If you cannot save up the cash, then you will not be able to afford the lease payments s the leesor is not going to lose money so you can have nice things earlier than you could save the money.
It's not as simple as that. I have the cash to buy a very expensive bike. But I also like having a functioning cash-flow. If something is a bit more expensive through leasing over the longer term, then other benefits accrue in other ways. If I was to buy a 4K De Rosa with cash, which I could do, it would then deprive me of a large chunk of what I have in cash terms at the moment and stop me doing other things I would like to do (honeymoon, house repairs etc, which all need paying for this year). Leasing would provide me with a certain flexibility, and flexibility is an asset in itself, which I don't necessarily mind paying for.
Hello Fursty Ferret,
Thank you. You have illustrated my point precisely. They say that cash-flow is king in a business. It is exactly the same thing with a family's cash-flow.
Once our offering fully explained, people generally recognise it to be a no-brainer:
+ lowest cost of ownership
+ least impact on household income
+ greatest flexibility
+ lowest ongoing costs
+ no catches
Also, has anyone had an opportunity to see Clause 10 of our Terms And Conditions?
10a) We recognise that at times of extreme financial duress, You may wish to cancel this agreement and return the Equipment. We enable you to do so under circumstances where your household finds itself unable to make the Monthly Payments. We understand the realities of life and have added this clause to protect You in these circumstances.
Therefore, you can add safe with no extended tie-ins to that list.
Best regards
Paul0 -
djhermer wrote:Unusual. It works with cars, plant and other capital goods for businesses because by leasing - rather than buying outright - it becomes a business expense and therefore tax deductible. Has advantages over
Capitalising assets which has an upper limit.
You're right. The car, and to a lesser extent plant, leasing industry was created on the back of a drafting loophole in Corporation Tax legislation. This has been largely closed but this was the kick start to the whole industry. Loads of companies have got used to not paying £25K up front for a new car and they can't get out of the habit due to cashflow considerations.
Doesn't apply to personal purchases like bikes so can't see it taking off, just like personal leasing of cars hasn't. The only way I could see it working was if the lessor could buy the bike for significantly less than the lessee could. Thereby they could pass on the savings in the form of lower lease costs. That's how the car leasing companies do it. However, I don't know if this company would be able to source more cheaply or not. Further, the second hand market for bikes isn't developed like cars so resale value estimation (again a big part of car leasing business) would be tough I thnk0 -
The reason I don’t think this works is that half the fun of owning a road bike is upgrading.
Manufacturers of stock bikes make compromises so that their ranges fit in at particular price points. Bikes rarely come with fantastic wheels, and this is often the first upgrade people make. Thinking about my own bike, the first thing I did was stick the supplied Wildcat wheels on my training bike and upgraded to Campag Zondas. A crash meant that a new saddle went on pretty soon, and I upgraded the bars at the same time and fitted a slightly longer stem. I’m on my second chain and cassette, and I’ve upgraded various other bits and bobs to titanium and carbon because I like a bit of bling.
This just wouldn’t work with a rental.0 -
ju5t1n wrote:The reason I don’t think this works is that half the fun of owning a road bike is upgrading.
Manufacturers of stock bikes make compromises so that their ranges fit in at particular price points. Bikes rarely come with fantastic wheels, and this is often the first upgrade people make. Thinking about my own bike, the first thing I did was stick the supplied Wildcat wheels on my training bike and upgraded to Campag Zondas. A crash meant that a new saddle went on pretty soon, and I upgraded the bars at the same time and fitted a slightly longer stem. I’m on my second chain and cassette, and I’ve upgraded various other bits and bobs to titanium and carbon because I like a bit of bling.
This just wouldn’t work with a rental.
Hello ju5tin,
Thank for raising such an excellent point. It gives me the opportunity to remind you that can indeed upgrade the bike if you wish. In fact, you can get upgrades from any of the suppliers we work with at trade plus VAT as you are a leasing customer.
As I keep reiterating, leasing represents the most cost-effective way to get a premium bike.
Here is the clause from the Terms and Conditions:We can help You do this by either selling You the upgrades at trade prices or adding it to the lease if You decide to upgrade at the start of the lease.
We'll even arrange for the mechanic to visit you to carry out the upgrade if you wish.
Also, please bear in mind that many people are happy with their bikes for 2 years and upgrade as they find it prohibatively expensive to change bikes regularly and so parts wear out.
Leasing let's cyclists get bikes with the spec they want from the outset. There is nothing stopping our customers from leasing a bike and a carbon wheelset specifically for racing if they wish. It makes even more sense to lease a wheelset that is intended for racing only as it will simply sit in the garage losing money on its "days off".
We shall shortly be offering custom build bikes (including bike fit) to our customers.
I hope that I have addressed your concern.0 -
Hi Paul.
Okay then, this might appeal to me if it meant that I could have a new machine every season (like a pro!)
What would be the monthly cost for a Felt F3 for one year? (I can only see a price for 24 months on your website – which is too long)
Cheers,
Justin0 -
Hi Justin,
All our leases are currently for 24 months. However, we are able to provide a means to have a new bike every year for people who become brand ambassadors.
If you'd like to discuss this then please feel free to give me a call using the telephone number on the website.
Best regards,
Paul0 -
I looked on the website and saw the servicing options but could actually see whats included with each option.0
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Nick1972 wrote:I looked on the website and saw the servicing options but could actually see whats included with each option.
Hi Nick,
Thanks for the observation.
I'm presuming that you meant that you couldn't see what's included rather than you could.
There is a slight design tweak that we need to make on this page of the site as it seems that the little "i" icon next to the Bolt-ons is not obvious enough.
If you put your cursor on the "i" next to the Bolt-ons you'll see a description for each service package bolt-on.
Please let me know if you have any further difficulties.
Best regards
Paul0 -
bikeleasingco wrote:Hi Justin,
All our leases are currently for 24 months. However, we are able to provide a means to have a new bike every year for people who become brand ambassadors.
If you'd like to discuss this then please feel free to give me a call using the telephone number on the website.
Best regards,
Paul
I don't think you want meas an Ambassador, Paul. I'm, er, 'stocky'.
For all the naysayers out there, Paul appears to have a comprehensive and reasonable respone whatever the criticism. I'd rather support someone trying their best to put good bikes our way in a different format (and who would begrudge him earning a living wage in the process?).0 -
I don't think you want meas an Ambassador, Paul. I'm, er, 'stocky'.
For all the naysayers out there, Paul appears to have a comprehensive and reasonable respone whatever the criticism. I'd rather support someone trying their best to put good bikes our way in a different format (and who would begrudge him earning a living wage in the process?).
Thank you Fursty Ferret.
Stocky is not an issue at all! We are looking for ambassadors who are passionate about cycling. That is the main criterion.
We're looking for any gender, any shape or size, over 24, but who love cycling.
If by stocky, you mean that life has been good to your calorie consumption
then we'd love to help you get a bike that helps you become fitter (not necessarily less stocky!); and for you to share that story with others.
Best regards,
Paul0 -
bikeleasingco wrote:Nick1972 wrote:I looked on the website and saw the servicing options but could actually see whats included with each option.
Hi Nick,
Thanks for the observation.
I'm presuming that you meant that you couldn't see what's included rather than you could.
There is a slight design tweak that we need to make on this page of the site as it seems that the little "i" icon next to the Bolt-ons is not obvious enough.
If you put your cursor on the "i" next to the Bolt-ons you'll see a description for each service package bolt-on.
Please let me know if you have any further difficulties.
Best regards
Paul
Hi Paul,
Thanks for that, I now see whats included.0 -
You're welcome Nick,
Would you mind sharing your views on what you would suggest we do with the design to make this information more obvious?
Change the colour, size, location etc etc?
Best regards
Paul0 -
What’s a brand ambassador?bikeleasingco wrote:Hi Justin,
All our leases are currently for 24 months. However, we are able to provide a means to have a new bike every year for people who become brand ambassadors.
If you'd like to discuss this then please feel free to give me a call using the telephone number on the website.
Best regards,
Paul0 -
Hi Justin,
If you give me a call on the phone I'll explain it to you. Our number is on the website.
It might be worth starting a separate forum topic on this as it may create another area of discussion:)
I look forward to hearing from you.
Best regards
Paul0 -
Hi Paul,
I still don't fully understand that detail of this but trying to figure it out. You keep saying that you think this is the cheapest possible way to buy a bike. I can see that it would likely be a very good deal for someone who would otherwise be buying a bike on credit. However, I am trying to ascertain, if I was 99% confident that I wanted to buy a particular bike, is there any reason to use your service as opposed to paying for it up front at a shop?
I can see if I might want to sell it in 2 years time this effectively gives me a guaranteed 30-40% sale, but if I want to keep the bike is it going to work out cheaper or more expensive?0 -
rstabler11 wrote:Hi Paul,
I still don't fully understand that detail of this but trying to figure it out. You keep saying that you think this is the cheapest possible way to buy a bike. I can see that it would likely be a very good deal for someone who would otherwise be buying a bike on credit. However, I am trying to ascertain, if I was 99% confident that I wanted to buy a particular bike, is there any reason to use your service as opposed to paying for it up front at a shop?
I can see if I might want to sell it in 2 years time this effectively gives me a guaranteed 30-40% sale, but if I want to keep the bike is it going to work out cheaper or more expensive?
Hi rstabler11,
Thank you for your query. I've been at the London Bike Show today so I apologise for the delay in responding.
The comparison you are making is with a cash purchase. If you look at the bike you are interested in on the website, you'll see that there are 2 lease options.
Option 2 is a lump sum lease. This is akin to making a cash purchase. Option 2 leases offer a further 10% discount on the lease total and means that you would not have any further payments to make for 24 months. There is a box on the website that shows the total cost. You'll see it change when you select a one of the options (please note that only option 2 is offered on most bikes with a lease below £1000).
Also, please remember that a comparison should also include insurance (which is 40-50% less with us), servicing and spares. We are focused upon making the total cost of ownership lower, and not just the purchase.
So, if you selected option 2, and subsequently went on to purchase the bike for 35% of the RRP after 2 years, you would very likely pay less than the RRP of the bike, and the ownership costs would be significantly less.
In a single sentence - you would save money - guaranteed.
Does this answer your query?
Best regards
Paul0 -
bikeleasingco wrote:You're welcome Nick,
Would you mind sharing your views on what you would suggest we do with the design to make this information more obvious?
Change the colour, size, location etc etc?
Best regards
Paul
Hi Paul,
To make this information more obvious would it be possible to have it on the home page somewhere, I missed it so plenty of others may too.
cheers,
Nick.0 -
Hello again,
Now that the Bike Show is completed, we've been able to update the site with the answers to your questions.
We now have a substantial FAQ button on the homepage.
I'd very much welcome your feedback as to whether we have answered everything for you.
Best Regards
Paul0 -
More questions.
1) What are you going to do with the 2 year old bikes?
2) What does the bike fit involve?0 -
Hello again,
Thanks for your questions. Here are the answers:
We'll sell them or lease them again if appropriate, but not necessarily in the UK.rstabler11 wrote:1) What are you going to do with the 2 year old bikes?
The current bike fit involves everything being adjusted and set up for you on the bike whilst you're sitting on it.rstabler11 wrote:2) What does the bike fit involve?
It does not involve taking body measurements etc.
However, we're about to start introducing a professional bike fit service with our partners across the UK.
We'll then be able to offer custom built frames as well to the leasing proposition.
Currently we can offer custom frames in Road and Tri from Hersh.it and for Marathon MTB from Chiru. Chiru was ridden by the Adventure Racing World Champions in 2011.0 -
Hi Paul,
I wish you well in your new business. I am a fan of finance/leasing as long as the numbers work for me (so different for everyone else) and as long as I have a good rate of finance.
Personally I have finance on both my cars, ones at 0%APR and ones at 4.9%APR, I could afford to pay for them both in cash but I can invest the money and get a better return elsewhere..
However, your statement of your company of being the "Guaranteed lowest cost" way to own a bike is questionable.
However I could be wrong but by my numbers your APR is approx 10%!?
So for example your De Rosa Protos RRP is £12000
2 year payments reach £10200 once your bike has been delivered and had a service (which would happen with a LBS).
Final charge of 35% equates to £4200 so total cost is £14400 so approx 10% interest per year..
Handing the bike back at this point would in fact mean a £12000 bike after 2 years is worth £1800!
Now maybe I have picked an extreme bike for this representation but the are cheaper ways to finance £12000 over 2 years and as many have said some bike shops offer 0%APR..
As said, I think you have a good business idea and I saw your company on Crowdcube before you came on here..
I think we all understand you are a business and you have to make money and us the customer will be the ones paying for it, which is fine and as I said above and others have said if it make financial sense to me at that point then its a good deal!
One question, do we have to take the insurance with you/your provider. A cost example would be good, as cheap insurance normally entails a very high excess..
Only comments on the web site:
I think you should show total cost of ownership on the page with the bike ie.
RRP
Deposit
Monthly Payments
APR
Term Length
Final Payment
Total Amount Payable:
I am sure this will be provided in the documents further down the line but more information early on will help people decide on their bike!
Good luck with your business..
GBR10 -
Thank you for the feedback GBR1.
We offer the guarantee on premium bikes, not all bikes.
You've chosen a peach with the DeRosa Protos. These are special order bikes and so are likely to be subject to different criteria.
The insurance for a Protos would cost you in the order of £940.75 if you bought it. Leasing it means that this cost comes down to £587.24. That's a £707.02 variance over 2 years.
The variance remaining is in the order of £1,692.98. As the lease runs we would be able to see the savings you make as a consequence of being a customer. For example, if you wanted to replace the Super Record EPS you would save one heck of a lot paying trade prices than retail (its RRP is in the order of £3.5-£4k)
The way the Guarantee works, you would get a rebate if you could show that the total costs would have been less if you bought it. Whatever happens, you would pay less overall with leasing than if you bought it.0 -
Actually to compare like for like - a lease plus purchase with purchase cost factored in, the APR is 17.37% or if you don't go for the purchase option its 20.05% in the above example.
Example 1: lease + purchase
£11,999 RRP
@ 17.37% APR with monthly repayments of £595.39 for 24 months gives a total of:
£14,289.44
Example 2: Lease and return or + cash purchase.
£11,999 - (£11,999 * 35%) = £7,799.35 Loan amount
@ 20.05% APR with monthly repayments of £420.38 for 24 months gives a total of:
£10,089.20
vs.
£99 + (24*416.28) £10,089.72 + (£11,999 * 35%) = £14,289.37
When calculating APR - people always forget that they are making payments against the advance, so the financed amount falls month to month.
PS - What happened to the tax man thread?
Since bikeleasingco has been very courteous, I'd say the positives are:
- its a good deal if you are the sort of person who puts a bike on your credit card and pays it off monthly.
- some of the bike APRs are substantially lower than 17% (nearer 12%), so if you can't get finance at that level it might work for you.
- if you are racing and need to have a top end new bike, insured and maintained every other season then this is a simple way to do it.
- if converting cap-ex to op-ex is attractive for personal, tax or business reasons then you could find it works out well.0 -
Hello again,
In response to diy's points:
I don't know why the tax-man thread disappeared. I guess it was becoming too geeky
Anyway, keeping to the geeky theme, we can continue to go backwards and forwards with the numbers.
At the end of the day though, it comes down to this. I guarantee that overall, you'll pay less with us, when taking into account the total costs of ownership. If it results in a cashback at the end of the lease, that's all well and good.
The reason I say this is because APRs are only relevant in so far as we have a statutory requirement to state the APR on any lease agreement. We do that.
If we chose to let someone have a £5000 bike for £1 and charged several thousand percent interest as an APR, they would still only pay in the region of £3,500 for it, but the APR would be bonkers. That's the point I am making. The APR is simply an indicator of how expensive something is. It does not show the actual cost. I prefer to work with actual figures. Hopefully, you all do too.
However, the brass tacks of it all are that the amount of money that leaves your wallet/purse will be less with us than if you purchased. That's both in terms of cashflow and absolute numbers.
Also, we have control over the prices that we offer the bikes at. We are able to adjust these as required. We'll always compete and we'll always do everything we can to make premium bikes more accessible. We've done exactly that with the Protos example
Does anyone out there think that what I am saying makes sense?
If there is support out there for what we're doing it would be good to hear from you. It would be a relief to hear reasons why we're a good choice, especially if 0% finance is available to you as well.0 -
perhaps it was looking too much like an advert?
You seem to be saying don't worry about the interest, think of the monthly payments? Financial advise worthy of a double glazing or leather sofa sales person in their prime.
Its disappointing that you find financial comparisons which identify the real cost of the advance as "too geeky" I would have thought anyone confident in their business model will be happy for people to do the sums. Its also worrying that you are asking if there is support for your business? Didn't you check first?
Lastly in the above post you are misrepresenting your guarantee. It attempts to be much more restrictive than you imply. I say attempts, because I am assuming there is a version of it that has been scruitinised by someone with basic legal knowledge? As it stands it offers nothing.0
