Is the cycle to work scheme still a good deal?

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  • Is the cycle to work scheme still a good deal?
  • quintet100
    Member

    Hi
    As above really, any thoughts, any one done it lately?
    I’m after a cyclecross bike so thought this may be a good route. I pay high tax.
    Thanks

    pondo
    Member

    I think the more you earn, the better it is for you. I don’t know of a reason not to use it, I’m on my second.

    Premier Icon mikewsmith
    Subscriber

    Depends on the details
    Length of scheme
    Bike Chosen
    Friendliness of LBS

    warton
    Member

    if you want to buy a bike that costs up to a grand, and want to spread the cost, there’s no better way to buy.

    quintet100
    Member

    Thanks chaps, I will do my best to get the company on board.

    tomkerton
    Member

    Just bought my CAADX on C2W from Evans

    Paper price £999

    Going to be deducted £50.83 for 12 months.

    So 39% discount and interest free payments.

    No brainer as the yanks insist on saying.

    Premier Icon geoffj
    Subscriber

    The devil can be in the final payment – I’m not convinced its worth the agro any more TBH
    Depends very much on your employer / scheme used

    Premier Icon Ben_H
    Subscriber

    I’ve used two scheme providers in the past and I pay 40% tax.

    You need to be careful to ensure that your costing includes:

    – Payments, less tax (this bit looks attractive)
    – Hidden “cost of finance” charges; typically 10-15%
    – 7% end of term fee / 3-year “hire” (3% below £500), as dictated by HMRC
    – any charge by the bike provider; e.g. Planet X charge 10%

    The savings are substantially eaten away by the above. I was considering going for a £1k voucher through Cyclescheme recently and calculated that the overall cost was going to be c.£850 for the bike I wanted.

    “tomketon” will find that the 39% saving won’t be that and that he’ll need to pay £70 at the end of the first year, or return the bike.

    So, the main attraction IMO is the convenience of a salary deduction. It’s an easy way not to pay £1k upfront and make the cost more bearable.

    I’d consider using a £1k voucher and putting more money in to buying a more expensive bike… except that I rarely buy complete bikes.

    Premier Icon riddoch
    Subscriber

    The rules of the scheme don’t let you top up, basically your company owns the bike and if you’ve put money in that makes in tricky. You used to get round it by the store discounting the bike to the voucher amount then selling you some surprisingly expensive accessories. This probably would cause problems for any insurance claim though.
    As one of the other posters said the savings are not that great anymore put it is still a cheap/free way to get an interest free loan.
    What’s also useful is that you more don’t need to buy a bike you can just get accessories

    Premier Icon spawnofyorkshire
    Subscriber

    I found that with a sale price (unavailable in scheme), interest free credit card for 18months and £95 back through quidco it worked out cheaper for me just to buy my MTB. I’m on the lower tax rate though so you need to make your own calculation.
    Buying using credit would give you access to more options and direct sales like canyon or Rose bikes as well

    Still a good way to buy through our lot as the end fee’s are not high.

    Premier Icon tomhoward
    Subscriber

    What SOY said,

    I got a much better deal buying a 2013 model (2014 has a very slightly different paint job) with 0% finance than I could have had on C2W (I’m basic rate tax, but the deal was still better than if I was on higher rate)

    Much better IMO, you arent limited to where you shop nor by the £1000 limit, though I *think* if your work has a consumer credit license, you can (could?) have up to £6K.

    edit: Plus when you buy on finance, the terms are laid out in black and white, unlike C2W which seem to be made up as they go along…

    Which is all very well if you want last years model and if the bike you want is heavily discounted. Not all are so you are even more limited in your choice.

    poly
    Member

    Which is all very well if you want last years model and if the bike you want is heavily discounted. Not all are so you are even more limited in your choice.

    Indeed – and certainly for higher rate tax payers I’m not sure there are that many bikes with 50% discount (no NI or PAYE) on them, which are not mutant sizes or simply overpriced in the first place.

    So, assuming you have the £1000 price cap and actually want a bike for commuting on, most weathers, year round, road – but not necessarily well surfaced – what is the ‘best’ purchase available? I’m thinking the Ribble 365 might be hard to beat?

    toyrobot
    Member

    Very interested in hearing the opinion of previous CTW buyers. I have been considering trying to get my employer (a University. I can’t believe they’re not already doing it) to sign up but it looks like there’s more to consider than the CTW FAQ section suggests. For example, I remember only a couple of years back my LBS telling me they would happily sell me any bike I wanted using the £1000 voucher (I later found out my then employer wasn’t signed up either) and I’d pay the rest. For the reasons above it now seems like this is either impossible or not recommended.
    I know you can us it against safety equipment, can you use it against parts?

    mindmap3
    Member

    It was a good idea for me – I was able to sneak another bike in without paying for anything upfront!

    I still reckon that I’ll save money (I bought a 2013 Allez Sport early in the cycle so no chance of discounts etc). As a lower rate tax payer its cost me £45/month for bike and shoes (£540) plus two years at £1 per month (£24) and the final payment of £52.50 – a total of £616.50 against a sepend of £810 or so.

    As others have said, the savings are better if you pay more tax.

    Rockhopper
    Member

    Ben_H – Member

    – Hidden “cost of finance” charges; typically 10-15%

    Hidden cost of finance? Can you expand on that one (as its not finance you a buying – its a bike hire scheme)?

    I’ve not heard of any one from my work getting hit for anything other then a token final payment to date, and that includes people I directly work with. I nearly did it a few months back and the figures I got quoted showed I’d pay around £1000 for a £1500 bike.

    I signed up to the Evans scheme through my last employer – got a Cannondale BayBoy with a RRP of £1400 for £999 in the sale on the scheme – it should have been around 50 a month for the 12 months and then the final token payment. But HRMC change the parameters half way through my hire period so the final ‘token’ payment had to be market value of 25% in the first year reducing to 0% in year 5. The upshot was that I left the company a year later and had to pay around £180 in the final payment so the bike ended up costing approx. £800-still better than the £999.

    I now have a new job with a different company and signed up to their scheme – so its not put me off – just watch the final payment amounts….

    quintet100
    Member

    Ummm lots of different scenarios going on.
    Me I like things kept really simple like me, no fuss, no messing around.
    After talking to our accounts dept today they where complicating the whole matter so I guess they won’t even buy into the scheme.
    So I think I will try and find a second hand one myself.

    Rockhopper
    Member

    They didn’t “change the parameters”, they just clarified what everyone should have been doing since the scheme started.

    Dibbs
    Member

    You’re only liable for the TAX on the amount of final payment eg. 25% of £1000 = £250, amount payable @ 40% tax = £100. A lot of people appear to be under the impression that the full £250 is payable, and I wonder how many employers are under the same impression (or just pulling a fast one). 😕

    toyrobot
    Member

    Am I right in thinking that although some people have ended paying more than they thought because of changes in process, that no one has ended up paying more than the bike was priced at? I guess any saving is a good thing. Sorry if this is a stupid question, this is really the first time I’ve looked into this scheme.

    They didn’t “change the parameters”, they just clarified what everyone should have been doing since the scheme started.

    By doing that they changed what I signed up for mid lease – my accounts department told me (verbally) that the final payment was typically a pound. By hmrc clarifying the scheme, accounts got scared that if they didnt change to this thinking imeadiatly hmrc would be after them so they applied this to all current and future c2w schemes.
    They got so much stick for it they stopped offering the scheme as soon as they could.

    fr0sty125
    Member

    Really depends on how much you earn and what sort of scheme employer runs. I did it earlier this year and mine will work out at about £520 for £900 bike when I take ownership of it.

    drapesta
    Member

    My employer wants the full 25% market value at the end of 18 months even after I have paid my money to look after, service and repair it – I dont think so

Viewing 26 posts - 1 through 26 (of 26 total)

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