The Pros and Cons of the Four Different Bike Finance Options

With so many options available in terms of style, design, build quality and accessories, these are exciting times to be investing in a new bicycle.

But, if you have to factor financing your new wheels into the decision making process then that excitement can quickly turn into an overwhelmingly confusing and stressful headache.

Don’t let thoughts of paying for your new bike take the shine off getting it. Get your head around the pros and cons of four different bike financing options now before you start shopping:

Cycle to Work Scheme:

This financing initiative was set up by the government to help employees commute to and from the workplace in a way that’s healthy and relieves congestion on the roads.

It covers the cost of leasing a bicycle and accessories up to the value of £1000, and is paid for through pre-tax, salary sacrifice payments taken at source for 12-18 months.

At the end of that period you have option of buying the bike outright and could save up to 42% on the original purchase price.

Pros: You can spread the cost of a new bike with no commitment to buy it at the end of the lease period. There’s no minimum spend and only 50% of your cycling miles have to be allocated for work so you can get a road bike or hybrid and enjoy it far away from the office.

Cons: £1000 is the spending limit and self-employed individuals, like those in minimum wage roles, are not eligible for the scheme due its repayment limitations. Things can become complicated if you decide to leave your employer and you won’t actually own the bike unless you pay for it at the end of the lease period.

You can find out more about this option by speaking to your employer to visiting www.cyclescheme.co.uk

Bike Shop Finance Deals:

Bicycle retailers, especially the die-hard enthusiast independents, often make great finance deals available on off-the-peg or custom build bikes and accessories.

Pros: You can choose any kind of road, hybrid or mountain bike finance deal you like and often benefit from 0% interest for up to 36 months. There are no spending limits so you can get the bike and accessories you want now and split the cost into manageable monthly payments.

Cons: There may be a minimum spend, usually of around £300 to qualify for a 0% loan and you might need to pay a small deposit.

Find out more by contacting a reputable independent retailer like Formby Cycles to find out more.

Personal Bank Loan:

This is perhaps one of the most traditional methods of borrowing money to make a purchase.

Pros: Most banks like lending money so will usually offer competitive interest rates, lengthy repayment terms to keep your monthly costs down or additional incentives such as discounted insurance policies for signing up with them.

Cons: Shopping around for the best deal and applying for it can be confusing and time-consuming and even if the interest rate for borrowing is low, you’ll still pay more for your bike and accessories than it actually cost in the long term.

Credit Card:

Most people have credit cards and make use of them for significant purchases. If you don’t already have one, it’s wise to shop around for the best deal and read the small print before signing up.

Pros: If you have a credit card and adequate funds on it to make a purchase, you can finance your new bike in the time it takes to enter a pin number. If you encounter subsequent problems it, the Consumer Credit Act guarantees a refund providing you spent more than £100.

Cons: Interest fees on a credit card are some of the highest and managing monthly repayments is solely your responsibility. If you don’t manage them well, you could spend much, much more on your bike than it originally cost and damage your credit rating.

Now you know how you could finance your new dream machine, you just need to decide what you really want to ride!

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