C2W 12 months or 48 months

mrkjd

I'm considering buying an electric bike which is £4k and the C2W scheme allows me to pay monthly repayments over 12 months up to 48 months. Since my total "saving" from tax and NI relief is the same whichever period I choose my initial thought was why not just go for the 48 months of much lower monthly repayments. But is it that simple? If I choose 48 months then left the employer before that period I would lose some of the tax relief "savings"as I would have to repay the outstanding balance.  Am I figuring this out correctly? Is there anything else I should be considering?

Herzlos

The scheme I'm with has a 12 and 48 month terms, but the payments are done over 12 months in either case and the length of the rental just affects the final purchase fee since a 1 year old bike is worth a lot more than a 4 year old bike.

I don't think there's any good reason to go for the 12 month term, and the increased buying fee more or less wipes out the tax savings.

If you leave the employment before you've finished paying then you'll need to make a lump sum payment to clear it, but I don't know if you can arrange to have payroll take care of that pre-tax.

mrkjd

Thanks Herzlos,

Do they give you a breakdown of the ownership fee payable after 12 months /48 months? Is there a formula for it? Like you say / might as well take it for 48 months! 

[Deleted User]

The scheme should show this on their website. The cyclescheme one I have used a couple of times has a calculator for the cost of the extended rental - it used to be 3% for a bike under £500 and 7% for over but maybe has changed

Herzlos

mrkjd said:

Thanks Herzlos,

Do they give you a breakdown of the ownership fee payable after 12 months /48 months? Is there a formula for it? Like you say / might as well take it for 48 months! 

Yeah there should be a fairly clear table with the fees for 12 or 48 months. As Farfetch mentioned, there's a price bracket as well with an even lower fee. From memory mine was 24% after 12 months or 7% after 48. I guess the risk is that if I leave the scheme between 12 and 48 months I'd need to come up with some arrangement to buy the bike from them.