Cycle to work scheme

adbanno
adbanno Posts: 7
edited October 2014 in Commuting general
I'm a bit confused about Halford's Cycle to Work Scheme. Wondered if anyone can help?

I've read in numerous places that you can make substantial savings through the scheme.

However, I've done the sums on a prospective purchase and I would save only £90 compared to if I bought the bike outright. If I were to leave my company say 12 months into the 18 month hire period that would shrink to £30.

However, because the retailer is charging me a 15% premium on the bike because it's in the sale and the scheme costs them money, the cycle to work scheme would actually be MORE expensive in total by £20.

Am I missing something here? Are any of my sums below wrong?

£750 retail value of bike and accessories

510 Total salary sacrifice
+112.50 15% on bike & equipment
+147 FMV after 18 months - 21% of original value
= 770 total outlay
= 20 more than buying new

Thanks in advance!

Adam

Comments

  • dodgy
    dodgy Posts: 2,890
    The 510 salary sacrifice is taken at source, before tax. Have you taken that into account?
  • redvee
    redvee Posts: 11,922
    I had that scare about the payments when I got my first wage slip with the C2W deduction on it, £76/month over a year then remembered I got a £1100 bike plus £60 of rack and guards too so my saving is even higher. Just looked at my account and my annual saving is £320 based on the £1k spend but given the above details it's closer to £500.
    I've added a signature to prove it is still possible.
  • surrey_commuter
    surrey_commuter Posts: 18,866
    the £750 is paid before tax/NI which at a combined 32% means you are actually paying £510.

    If the retailer is bumping up the price then you well be better off buying elsewhere
  • The Rookie
    The Rookie Posts: 27,812
    Halfords scheme, so limited scope for different retailers.
    Currently riding a Whyte T130C, X0 drivetrain, Magura Trail brakes converted to mixed wheel size (homebuilt wheels) with 140mm Fox 34 Rhythm and RP23 suspension. 12.2Kg.
  • bigmonka
    bigmonka Posts: 361
    British cycling membership will get you 10% off at Halfords too, so with that and the sale price it sounds like you'd be better off buying it yourself (not to mention that you'd be the owner of the bike rather than someone else for 4 years). The main benefit you might miss is the cost being spread out over the months.
  • thistle_
    thistle_ Posts: 7,154
    BigMonka wrote:
    British cycling membership will get you 10% off at Halfords too, so with that and the sale price it sounds like you'd be better off buying it yourself (not to mention that you'd be the owner of the bike rather than someone else for 4 years). The main benefit you might miss is the cost being spread out over the months.

    If you really want to pay monthly see if your employer will do an interest free loan for bike purchase (some do) and explain that because you're tied to Halfords it's cheaper not to use their C2W scheme.
  • richk
    richk Posts: 564
    On my last C2W (not Halfords) I 'only' saved around £100 on a £700 bike. More important (for me) though was not having to find the £700 up front.
    There is no secret ingredient...
  • matt@theforce
    matt@theforce Posts: 647
    You've not taken into account your savings on your commute either, my cycle commute per shift saves me around £9 which I deduct off the cost of the bike

    A brief calculation of my previous bike (not a Halfords scheme) on a £1000 purchase
    £258 spent on consumables & servicing / Salary deductions (approx) £492 = £750
    Cycled to work 74 times at a saving of £9.50 per day = £703
    Final purchase price £250

    Total Cost of ownership (so far) £750 - £703 + £250 = £297

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