Cycle to work scheme - is it worth it?

Mark_Hewitt

As with most government schemes like this, it's far too convoluted and complicated and with too many caveats to make it actually useful. The 'final payment' thing, destroys the entire scheme IMO.

Mids_Costcutter

thatlemming wrote: »

Surely those insurance costs are way out? The cheapest on there is 667 or something, I didn't even pay that much at 17! Paid just under £300 last year as a 21 year old, so I can't imagine there'd be many people paying sooo much more?! My car wasn't brand new but it was only a couple years old, it wasn't a banger.

Who knows. I sold my car last month and bought a bike for just over 2k instead. Insurance is less than £100 and that includes race insurance. I have no need to drive anymore, my work, uni and home are in the same city, and my parents live 35 miles away which is an easy cycle ride.

The insurance figures do seem on the high side, but according to the accompanying notes "The value used is a UK average for a fully comprehensive policy with 60% no-claims discount". Perhaps younger drivers and higher risk areas skew the average?

Marco_Panettone

Mids_Costcutter wrote: »

The insurance figures do seem on the high side, but according to the accompanying notes "The value used is a UK average for a fully comprehensive policy with 60% no-claims discount". Perhaps younger drivers and higher risk areas skew the average?

It will also be skewed by the difference between urban and rural insurance costs. Car insurance in London is considerably more costly than in the shires, but cycling is also more practical in cities as journeys tend to be shorter, parking more limited and traffic slower.

Andofire

It's a no brainer if you want a bike. I pay 40% tax. In this bracket you get 42% off the bike cost. Up to £1000 including accessories. You don't have to spend it all.
Equal payments direct from salary before tax. You are in effect hiring the bike from your employer as they pay the C2work scheme/shop up front.
At the end of the term (12months), you get the option then to hand it back, buy it out right for a fair market value (this really districts your savings) or if its over £500 a nominal final payment in month 13 of £70. £50 if under £500. This enables you to continue to 'hire' the bike (no further payments) for 3 years. You don't pay anymore money.
They don't check, even if you don't cycle to work on it!
Ultimately, you get a bike to keep fit tax free. I really can't see the catch if you want a bike.
At 12 months you can get another one if you so wish.
Obviously some will see this decadent. But as I've said, if you want a bike, keep fit and cut commuting costs, it's a tax free loan, paid back at 0%.
Catch??? If you don't need or want a bike don't take part. I'm on bike 2 now. Nice road bike and new mountable.
Hope this helps.

Idiophreak

I disagree that this is a no-brainer, as such.

The final payment can take a significant chunk out of your savings (even £70/500 is a fair whack), so the savings aren't as great as the headlines suggest.

Then you have to jump through so many hoops to get the thing in the first place- my friend's just got his on the scheme and it took about 2 months, plus chasing to get the bike. I ordered mine online and it was delivered next day.

The scheme restricts where you can buy the bike from, which may prevent you from getting the best price.

You have a question mark about what happens to the bike if you leave your employment mid-term.

And you are stuck with the finance terms as prescribed by the scheme...Personally, I opted to have my bike on 0% for 18 months to keep the monthly cost down.

Add it all up and the result isn't "no-brainer", it's actually "close call".

Big_G_RC

I see a lot of bike shops offering 0% 12/18month finance on their range anyway. You pay 10% on the day and spread the rest. I bought mine for £650 which worked out at about £45 a month for the following 12 months. My maths is probably slightly off there before someone splits hairs

A friend is doing this scheme and it's been like a month. I couldn't be waiting around that long to get my bike personally.

J65ON

There are some other factors that you might want to take into account with Cycle to Work...

Ex Students, I'm taking to you...because my gross salary reduced through the scheme the amount of student loan payable each month was reduced.

On my £550 Cycle to Work sacrifice I saved £4.13 a month in Student Loan deductions. This is just under £50 for the year or an extra 9% savings on top.

For my £550 bike I saved:
£175.92 through tax and insurance
£49.56 through Student Loan
Paid a final payment of 7% for 3 year loan (as per tax rules) £38.50

Final cost of bike to me was £363.02 which is still a 34% saving

Idiophreak

J65on wrote: »

£49.56 through Student Loan

...which you *will* still pay back, it will just gather further interest through delaying payment...

forze

Personally I don't think it pays back. There will be days when the weather is horrible so you decide to take the car/public transport. Other days perhaps you have to stay till late at work or social conditions just dont allow it and end up too tired to cycle back. Then there will be days when you're just plain tired and can't cycle.
So, unless you are really commited to cycle 100% no matter the time of the day, the weather and your physical state, then it is not worth it.

Marco_Panettone

forze wrote: »

Personally I don't think it pays back. There will be days when the weather is horrible so you decide to take the car/public transport. Other days perhaps you have to stay till late at work or social conditions just dont allow it and end up too tired to cycle back. Then there will be days when you're just plain tired and can't cycle.
So, unless you are really commited to cycle 100% no matter the time of the day, the weather and your physical state, then it is not worth it.

That's not the point though - you still get a bike to keep and use whenever you want for less than the RRP. If you look after it the bike will last you for many years. You get to use it at the weekend, through the summer, whenever you decide it'd be nice to go for a ride.

It's all about choices of how to travel (which you still have). Cycle when you want, just on a bike that was cheaper to purchase. Cycling is 'worth' more financially the more you do it, but that remains an individual decision.