Is the Cyclescheme worth it?

supermurph09

My employer has now launched our cycle to work programme through www.cyclescheme.co.uk , I was just looking to seek advice from anyone who had used one recently. My experience of it 6 years ago was a good one, it got me into cycling when I would have otherwise not had the funds to purchase a bike and everything I needed to get started.

We can buy bikes and accessories upto £1,000. Great to see that the choice of retailers is much more varied than it was before (Rapha, Wiggle, Ribble etc) and also interesting to see that there are deals through the scheme itself. As an example, "Specialized Allez Elite 2019 Road Bike Blue", retailing at Rutland for £999, available through the scheme at £750 and then you obviously get the additional benefits on top of that.

I currently have one bike, a Canyon Ultimate SL 9.0 (4 years old), I've always been in the market for a second bike, either bad weather bike, or something like a CAAD12 / TCR advanced to replace the Canyon with, those 2 obviously outside the £1k limit.

Options: buy bike like the Specialized (Or Ribble Audax etc) that becomes the bad weather bike, upgrade the Canyon over time (R8000 etc)

Options: use the scheme to maybe buy groupset or just get some new kit (Perfetto and a few other items)

So a few questions really

david7m

It makes the bike cheaper and spreads the cost, dont see any downside, unless maybe you leave your company and they ask for the balance left in one lump.
Will be doing this in the spring also
Dave

akh

The window to sign up to the scheme will be opening with my employer soon. I believe the deduction happens before income tax, so higher rate tax payers save more. Basic rate payers like me save about 25% (a bit or a lot less once you make the payment at the end of the hire period to become the owner of the bike).

I doubt there's any practical impact, but you don't technically own the bike for at least 12 months, possibly longer. Does anyone have any insight into the effect of this, if any?

If the main benefit is simply the 0% loan I don't see much benefit given how readily available 0% credit cards are.

supermurph09

akh wrote:

The window to sign up to the scheme will be opening with my employer soon. I believe the deduction happens before income tax, so higher rate tax payers save more. Basic rate payers like me save about 25% (a bit or a lot less once you make the payment at the end of the hire period to become the owner of the bike).

I doubt there's any practical impact, but you don't technically own the bike for at least 12 months, possibly longer. Does anyone have any insight into the effect of this, if any?

If the main benefit is simply the 0% loan I don't see much benefit given how readily available 0% credit cards are.

The main benefit is you don't pay tax and NI on the amount of your package. So in the example I am seeing on the scheme, package price £753, final package cost inc ownership fee = £562.

In this example I would be paying £62.50 per month for 12 months which obviously = £750 but you get tax and NI back so bring home more in you pay packet thus saving you £188. (750-562 = 188).

supermurph09

I'd also add that pretty much every retailer that I'd consider buying a bike from under £1k is on there.

akh

Supermurph09, I get that, but to realise the full saving you have to enter into an addition 3 year 'Extended Use Agreement', and therefore don't own the bike outright for 4 years. At least that's my understanding from this FAQ:

https://www.cyclescheme.co.uk/help/faqs/end-of-hire

In practice this probably means nothing, as I doubt anyone checks or cares. I'm interested to know if there are likely pitfalls of this (changing employer, etc.) . According to cyclescheme themselves, if you want to take full ownership after 12 months the payment you're required to make to HMRC almost eliminates the savings for a standard rate payer.

trek_dan

akh wrote:

Supermurph09, I get that, but to realise the full saving you have to enter into an addition 3 year 'Extended Use Agreement', and therefore don't own the bike outright for 4 years. At least that's my understanding from this FAQ:

https://www.cyclescheme.co.uk/help/faqs/end-of-hire

In practice this probably means nothing, as I doubt anyone checks or cares. I'm interested to know if there are likely pitfalls of this (changing employer, etc.) . According to cyclescheme themselves, if you want to take full ownership after 12 months the payment you're required to make to HMRC almost eliminates the savings for a standard rate payer.

Everywhere I have worked HR have forgotten/weren't bothered about about the alleged 'lump payment' at the end of the scheme and the bike is yours after a year.

tonysj

trek_dan wrote:

akh wrote:

Supermurph09, I get that, but to realise the full saving you have to enter into an addition 3 year 'Extended Use Agreement', and therefore don't own the bike outright for 4 years. At least that's my understanding from this FAQ:

https://www.cyclescheme.co.uk/help/faqs/end-of-hire

In practice this probably means nothing, as I doubt anyone checks or cares. I'm interested to know if there are likely pitfalls of this (changing employer, etc.) . According to cyclescheme themselves, if you want to take full ownership after 12 months the payment you're required to make to HMRC almost eliminates the savings for a standard rate payer.

Everywhere I have worked HR have forgotten/weren't bothered about about the alleged 'lump payment' at the end of the scheme and the bike is yours after a year.

Yep, That's what happened at the end of my 12 months, the bike was mine and the employer never asked or requested any further money.

bobmcstuff

tonysj wrote:

trek_dan wrote:

akh wrote:

Supermurph09, I get that, but to realise the full saving you have to enter into an addition 3 year 'Extended Use Agreement', and therefore don't own the bike outright for 4 years. At least that's my understanding from this FAQ:

https://www.cyclescheme.co.uk/help/faqs/end-of-hire

In practice this probably means nothing, as I doubt anyone checks or cares. I'm interested to know if there are likely pitfalls of this (changing employer, etc.) . According to cyclescheme themselves, if you want to take full ownership after 12 months the payment you're required to make to HMRC almost eliminates the savings for a standard rate payer.

Everywhere I have worked HR have forgotten/weren't bothered about about the alleged 'lump payment' at the end of the scheme and the bike is yours after a year.

Yep, That's what happened at the end of my 12 months, the bike was mine and the employer never asked or requested any further money.

I went through cyclescheme twice at my old company, and on both occasions I had to pay the nominal fee to extend the hire agreement for a further 3 years (rather than stump up the lump sum). It made b*gger all difference - depending on the exact dates my previous employer might even still technically own the second one, even though I left over two years ago. This is the first time I have given it any thought.

First time was for an £800 Defy from Edinburgh bicycle co-op. My second bike was a Condor, they allowed me to put £1k from cyclescheme towards it and then pay the rest cash. Condor just wrote a quote for £1k to give to cyclescheme to get the certificate.

bobmcstuff

In terms of whether it is worth it - I think for the first one it gave a real saving, for the second one Condor charged a £60 fee for going through a cyclescheme and with the bike being £1,600 anyway I might have been better off trying to get a bike on sale elsewhere (although I do love my Condor and it's hard to come by reduced ones).

You may find it works out a better saving to get a sale bike on 0% finance, many retailers won't do cyclescheme on discounted bikes but will do 0% finance.

supermurph09

bobmcstuff wrote:

In terms of whether it is worth it - I think for the first one it gave a real saving, for the second one Condor charged a £60 fee for going through a cyclescheme and with the bike being £1,600 anyway I might have been better off trying to get a bike on sale elsewhere (although I do love my Condor and it's hard to come by reduced ones).

You may find it works out a better saving to get a sale bike on 0% finance, many retailers won't do cyclescheme on discounted bikes but will do 0% finance.

Yeah I think having given this some thought I may just look to put any purchase on a 0% card rather than be concerned about paperwork, end of scheme payments and ownership rights etc. Like you say, I think retailers are wise to the fact they can charge extra which would lessen the scheme benefits.

It might make sense if you go through the scheme if they have specific offers on, but having spent the last few days deliberating I’m not sure those bikes are suitable.

cycleclinic

Retailers loose 10% of the sale to cyclescheme that why many shops levy a charge. For the retailer, it's actually a poor deal. they only offer it because if you're in the business of selling bikes you end up having to. That one reason why I think selling bikes is not profitable anymore (in a showroom sort of way) once you consider all related costs. So these schemes, I think, harm the trade more than help it, in the end, that's a poor deal you all of you. It makes it more difficult for new business to start up and entrench the dominance of a few bigger retailers with there economies of scale.

Your also less likely to get a bike on a deal. you may but then you are ensuring the retailer is more likely to make a loss.

I also think buy what you can afford in one hit. If that means you buy a £500 bike instead of £1000 bike so be it. Its meant to encourage commuting and there are plenty of £500 bikes that can do that well.

Schemes like this are a classic example of a well meaning policy implemented without any thought to the full implications to the industry as a whole. Also does it really encourage cycling to work. The juries out on that one.

helterskelter

My employer uses the Evans scheme which has been really good. For bikes they have the 3 year extended hire option which avoids paying the fee, you then own it at the end of this period. I find it much more useful for a yearly purchase of discounted kit & components. You don't have to pay a lump at the end of the year for these.

I save 32% for doing it on the scheme plus an extra 10% off for BC membership and spread across 12 months.

supermurph09

helterskelter wrote:

My employer uses the Evans scheme which has been really good. For bikes they have the 3 year extended hire option which avoids paying the fee, you then own it at the end of this period. I find it much more useful for a yearly purchase of discounted kit & components. You don't have to pay a lump at the end of the year for these.

I save 32% for doing it on the scheme plus an extra 10% off for BC membership and spread across 12 months.

Great idea.

CitizenLee

It hasn't been worth it for me so far, but it's an issue with my employer rather than the scheme itself.

-Ordered the voucher through my work's benefits provider on 1st July.

-CycleScheme sent the invoice on to my work on 16th July

-First salary deduction came off my wages on 27th July

-It's now 16th August and I don't have a voucher, let alone a bike!

Tried chasing up HR/payroll but it's impossible to speak to them directly as they hide behind a generic department email account.

We're no small company either... 55,000 employees worldwide with a revenue of $5.394 billion... yet they can't sort out a bloody £950 voucher! I've seen them pay bigger bar tabs at corporate events.

Anyway, if it's not here by August payday then I'm just going to cancel it and ask for my first deduction back.

bobmcstuff

supermurph09 wrote:

bobmcstuff wrote:

In terms of whether it is worth it - I think for the first one it gave a real saving, for the second one Condor charged a £60 fee for going through a cyclescheme and with the bike being £1,600 anyway I might have been better off trying to get a bike on sale elsewhere (although I do love my Condor and it's hard to come by reduced ones).

You may find it works out a better saving to get a sale bike on 0% finance, many retailers won't do cyclescheme on discounted bikes but will do 0% finance.

Yeah I think having given this some thought I may just look to put any purchase on a 0% card rather than be concerned about paperwork, end of scheme payments and ownership rights etc. Like you say, I think retailers are wise to the fact they can charge extra which would lessen the scheme benefits.

It might make sense if you go through the scheme if they have specific offers on, but having spent the last few days deliberating I’m not sure those bikes are suitable.

FWIW I think the end of scheme payment and ownership stuff is a complete non issue.

But yeah, getting a discounted sale bike on a 0% deal of some sort is likely to give just as good a saving.

londoncommuter

pppp

andy9964

My scheme had a "finance charge" added - £58, and the final payment @7%+VAT - £59 on a £700 voucher price.
Total saving, around £75. Not even close to the 30% suggested
Bought another bike 3 months ago on a 0% C/C. No restriction/commitment to price, bike shop, purchase window, and I'll pay it off quicker.
Wouldn't use it again.

photonic69

You are possibly better off buying for cash in a sale. At the moment there are good deals of 15% or more off 2018 models. Using the Cyclescheme online savings calculator I'd get 7% off the RRP of the bike through cycletowork Luckily I can afford the sale price rather than cycle scheme pricing. Still looking for the bike I really want though.

helterskelter

Yeah being tied to the evans scheme isn’t ideal as we all know that they aren’t the most ‘competitive’ vs the rest of the market.

All kit has been brought through the sale and only on things I actually need such as decent winter gear and upgraded components which I’d have ended up buying anyway.

Annoyingly yes evans only lets you use one promotional code at any one time.

cycleclinic

why is annoying to one promo code at once. promo codes are meant to boost sales and profits (I am not sure they do boost profits, but that's the theory) if you can use more than one at once the retailers makes a loss and bingo there won't be a retailer to use again. it is sound logic on Evans part, they would be daft to give it away right? Think like a business please a transaction has to be worth it for both sides.