Cycle to Work Scheme experiences

[NorthernSky]

hi
i was looking into cycle to work. i had my eye on a £1000 bike.
the agreement is you 'hire' the bike for 12 months, then at the end you have the option to buy the bike at current market rate as calculated by HMRC (via a Fair Market Value payment)

i have been told that on a £1000 bike that it will cost £250 to buy!
seems very high to me.

there is another option to go into an extended 5 year agreement and by then the bike is yours for free.

just wondering others experiences

 

[vickster]

Presumably you intend to stay with your employer for 5 years after the agreement ends. If not, look at the numbers if you should leave carefully.
Personally I’d just buy outright on interest free credit (or cash)

 

[Milkfloat]

You may find that that you pay for the bike over one year and then the cycle scheme (not the company) hold ownership for the rest of the agreement so it does not matter if you leave the company you work for. By all intents and purposes you can treat the bike as yours once it is paid for.

 

[rivers]

Presumably you intend to stay with your employer for 5 years after the agreement ends. If not, look at the numbers if you should leave carefully.
Personally I’d just buy outright on interest free credit (or cash)

No need to stay with the employer for another 5 years. The "extended loan agreement" cost nothing (or something nominal) and is just a way to get around the fair market value charge. It's only if you leave during the initial hire period where you need to be careful.
I've used C2W several times. It's a relatively pain free way to get a bike and pay for it over the course of a year if you don't want/can't get a credit card or interest free finance.

 

[vickster]

Insurance is important too for that first year, who wants to pay for something they no longer have!
Personally, I don’t buy anything I couldn’t afford to buy outright (I’ll take free credit even if I could pay)

 

[NorthernSky]

i can afford a bike outright but i wanted to make a big saving on a bike, as i'm sure a lot of people do
the extended agreement option reads " Enter into a FREE Extended Usage Agreement for a further 5 years "

seems the fair market value is 25% if you want to buy. odd as i was speaking to a friend in work who did it and he said he was offered the bike for £50 or something, after the year

 

[vickster]

In that case you are obviously in a privileged position compared to others.

C2W is the closest some people can get to interest free credit. Me? I use it to maximise savings.

I agree though that insurance should be ranked highly in the thought process when people are considering C2W.

Just a higher rate tax payer like yourself

 

[vickster]

i can afford a bike outright but i wanted to make a big saving on a bike, as i'm sure a lot of people do
the extended agreement option reads " Enter into a FREE Extended Usage Agreement for a further 5 years "

seems the fair market value is 25% if you want to buy. odd as i was speaking to a friend in work who did it and he said he was offered the bike for £50 or something, after the year

Schemes vary and the rules did change a few years ago. There never used to be an end fee

 

[kingrollo]

hi
i was looking into cycle to work. i had my eye on a £1000 bike.
the agreement is you 'hire' the bike for 12 months, then at the end you have the option to buy the bike at current market rate as calculated by HMRC (via a Fair Market Value payment)

i have been told that on a £1000 bike that it will cost £250 to buy!
seems very high to me.

there is another option to go into an extended 5 year agreement and by then the bike is yours for free.

just wondering others experiences

I brought a £3.5k bike. Extended the loan agreement for a further 5 years nothing to pay at the end.

 

[wiggydiggy]

hi
i was looking into cycle to work. i had my eye on a £1000 bike.
the agreement is you 'hire' the bike for 12 months, then at the end you have the option to buy the bike at current market rate as calculated by HMRC (via a Fair Market Value payment)

i have been told that on a £1000 bike that it will cost £250 to buy!
seems very high to me.

there is another option to go into an extended 5 year agreement and by then the bike is yours for free.

just wondering others experiences

I've had 4 bikes, all different schemes. Whichever scheme you use make sure you read the full agreement - my current one was adhoc with a single local supplier (we've since changed to Cyclescheme) and seemingly I get no option to buy at the end of the term. I'll find out next year! The other three all were supposed to ask me for a fair market value payment but none actually did.

Regardless of my latest scheme I do like them overall, especially with bikes over £1000 it can be good to spread the cost int free and of course there is the Tax and NI savings too.

 

[Deleted User]

I brought a £3.5k bike. Extended the loan agreement for a further 5 years nothing to pay at the end.

I thought it was limited to £1000, or is that depending on the company you work for?

 

[si_c]

I thought it was limited to £1000, or is that depending on the company you work for?

The rules have changed recently and there is no longer cap. I checked today and mine is £5k.

 

[Sharky]

My experience from almost 12 yrs ago that it was a fairly painless process. Our scheme was only "open" for a set period, so there was a waiting period before the order went in. You don't notice the cost as it is taken out of your payslip. I think the main savings were zero vat.

But within a few weeks of receiving it, I spotted the same bike being offered for £100 less. So you need to do your homework and evaluate all ways of buying.

I DID use the bike for commuting. Almost immediately, I replaced bars, saddle, tyres etc, so if it had to be returned, it would not have been in the original condition.

I carried on working for more the 5 years, so the question of a final payment never arose. Still have it and is one of my favourite rides.

 

[Alex321]

I thought it was limited to £1000, or is that depending on the company you work for?

Nowadays it is dependent on the company you work for and/or the scheme supplier.

Our company, with the scheme from Cycle Solutions is still limited to £1000 (and the company only joined in June this year, well after that limit was scrapped in the legislation).

I would have used it if it weren't limited to £1000, when I bought my new bike in August.

 

[Deleted User]

The rules have changed recently and there is no longer cap. I checked today and mine is £5k.

I shall need to check our scheme, cheers.