The company I work for has just started offering Cycle to Work.
I’m guessing that many of you will have signed up and I just have a question regarding the most cost effective method once the first 12months loan period ends….

The only way I can see that you eventually save money would be to re-extend the contact after 1 year to a further 3 years.
To do this, from what I can tell, you pay a small deposit of between 3% & 7% of the original value and make no further payments and the bike is signed over to you after the total of 4 years (initial 12 months making payments -> 36 months without making payments).
Where as if you wanted to own the bike after 1 year I understand you would have to pay “Market Value” which is 18% – 25% of the original value; basically equal to the money you would have “saved” by not paying NI or Tax. Guessing it would work out just like having a 0% finance deal which alot of bike shops offer now anyway? It’s offered through cyclescheme if it makes any difference.

Next would be the fun part of choosing a bike!
I commute by bike now anyway so it’s a good opportunity to pick up a road bike, I already have a hardtail Cube to use for off road/cross country rides.
I would still use the Cube to cycle to work on the bad days and the road bike for the better, dryish days, I know this isn’t really above board but I can’t imagine anybody I work with walking to the bike racks to keep tabs on if it’s a road bike or a mountain bike i’ve turned up on, I’ll be arriving in cycling gear with a helmet everyday no matter what anyway.

I can’t decide which “type” of bike to be looking at, it seems most manufacturers offer a racing or a more comfort/endurance model for the same similar price, EG.. CAAD8 vs Synapse, Allez vs Secteur.
I’m leaning more towards the race inspired geometry bikes, has anybody had experience with one or the other, not just Specialized and Cannondale brands I just mean Race vs Enduro in general.

Thank you in advance

You generally do better by getting a 0% credit card and going into the shop as a cash buyer, so they’re far more amenable to doing deals. C2W costs the shop 10%, and with the fair market value crap it isn’t as attractive as it was from a cost saving perspective.

Geometry wise you need to try both! Coming from MTB there’s every chance you’ll prefer a more upright position, but I personally find my Allez too upright – I’ve taken all the spacers and the headset top cap off to get the stem low enough! I can’t abide Roubaix/Secteur type geometry, feels like I should be riding to the shops! However, of course YMMV.

I did the sums with my work and picked up a road rat alfine for 550 quid

Worked out the best way to get that bike for me. We have the 4 year thing but given i use it significantly more than your typical c2w user im fairly sure after my year fmv on my bike will be peanuts.

Our company also wrote into the contract that if we leave within the first year the final payment to settle will equal no more than the remainder of the 12 payments on the bike.

I was sceptical , but i think they had extremely poor uptake the year before , and parking / road infrastructure round the office is limited. The terms were significantly better than the previous year !

if they offer it through Cyclescheme then the contract extension is the way to go. It’s a HMRC-sanctioned loophole after a load of others were closed making the scheme less attractive. You pay a small sum to extend the contract, which just happens to exactly match the final valuation the bike would have at the end of the extended contract, and then pay nothing more.

You no longer get the VAT off thanks to a european court ruling (aimed at Astra Zeneca giving retail vouchers as part of a salary sacrifice scheme but with wider implications), so whether its worth it depends on how fussy you are on what particular bike you get, and whether youre basic or higher rate tax payer. If youre not fussy and a basic rate, a last-years model from the likes of Pauls Cycles at reduced prices might be a bigger bargain.

ferinstance 38% off

http://www.paulscycles.co.uk/products.php?plid=m7b65s6p4510

Hey thank you all for your comments.
njee20 yea I plan to go to a few bike shops round here to get the feel of a few, I think I will be looking at ones with more of a race geometry and a compact drive.

TrailRat; do you know how the calculate the fmv at the end of the year, does somebody actually come out to inspect the bike or do they work it from milage or what?

Crashtestmonkey the bike that you linked to isn’t available on C2W but a really good idea to go for the previous years model. It’s what I did with my Cube LTD SL, 2012 model reduced by 20%.
Also I noticed that the bike you linked was a carbon frame, I had written off the idea of getting carbon because of my budget. Is it better to go for a lower spec carbon frame or higher spec’ed aluminium??

Its just a % number.

Our scheme (yours may differ) is that you either 1 Give the bike back at the end of the 12 months, or 2) receive the bike from the company as a gift, which is taxable. My bike had a ticket price of £1000, I’ve paid 12 months at 1000/12 pre tax, and been given the bike which is valued at £250. My tax code has been adjusted so that I pay HMRC 40% of that £250 over the next 12 months. So in total I will have paid £620 for a £1k bike. For all those who say they can raise 12 months 0% and get a healthy discount on a £1k Cube Peloton, go ahead and show me how you did it. I pre-ordered mine in October 2011, and finally got it in February 2012. All the stock was sold on pre-order. I somehow doubt you’ll get anyone to discount one of those by £380.

You generally do better by getting a 0% credit card and going into the shop as a cash buyer

Or, if your a small company, do the whole, shop around thing, get the boss to write the cheque, then do the scheme as per Scapegoat!

As TR says its a % based on age (ie. Length of scheme). If they paid people to go value bikes they’d lose money with the salaries, overheads. They are a paperwork admin company and don’t want to go anywhere near a bike!

I wasn’t suggesting that bike on the scheme, I was highlighting you could get a better deal by not using the scheme. I recently got an old-stock Lapierre from CRC for 45% off, as a basic rate taxpayer the scheme couldn’t get near that.

The HMRC FMV figures are agreed minimum figures above which they won’t ask any questions, and they’re pretty low (e.g. £250 for a 1yo £1k bike).

If you really believe that your bike is worth less than that, then you can transfer it for less, but you’ll need some evidence (e.g. photos) for why the valuation is so low. If it’s through one of the middleman companies like Cyclescheme, I doubt they’ll be interested in doing this even if you could justify it.

As others have said, if you run the scheme yourself then you can find the best deal that you can for cash, put it through the scheme and enjoy the best of both worlds.