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I've been looking at this and had a quote on a bike costing just under a grand with 12 x monthly payments of £53.66 giving a total of £643.92 when tax deductions etc are taken into account.
Sounds good except..............................
SmeHci have a commission (according to the supplier and which has to be paid separately by me) of 12.5% AND charge a 'disposal fee' of £120 at end of term. So 'bargain' of £643.92 suddenly becomes less of a bargain at £888.92.
A few questions arise out of this.
1. Do retailers normally just absorb this fee rather than pass it on to the customer?
2. SmeHci are receiving £245 on the deal. Are they providing the credit, or is it simply an administration of money advanced by the Government?
3. Am I the only one who thinks this 'disposal fee' is a bit of a piss take and simply a means of increasing profits as presumably very few 'disposals' actually take place and it is a simple transfer of title to the goods.
It's still a good deal in as much as it saves me over £100 with interest free credit for a year but it strikes me that the real winners in all this are SmeHci, who, depending on how the bikes are funded, are either making a good profit, or a very very good profit with virtually no risk.
There is just something about it which doesn't feel quite right to me.
Well done for actually working it all out and not being seduced by the initial apparent saving.
IMHO, the scheme should now only be considered a way of getting cheap credit. Let's face it - if you went into a LBS with £1k in cash, you'd be able to negotiate some sort of discount off RRP, or even opt for "last years model" and save even more.
Normally the end of year fee is the charge to take the bike from the lease to private ownership and the tax implications of that. I can be reduced by extending the hire to 3 years. When I did Cyclescheme the LBS absorbed the 10% fee as that is what they would normally offer in a discount but all C2W purchases were at Full Retail.
Sounds like they are getting a little greedy.
However if you get interest free from the LBS they are paying the interest for you - no such thing as free 🙂
The biggest question is do you need the bike?
Yup.
A good relationship with your LBS will save you as much and maybe more, and they'll say your name when you walk in the shop, a bit like Cheers.
The NHS scheme is too little, too late and is run by some wally in an office who gets paid too much for doing too little.
That gave me a laugh and of course I don't [b]need[/b] it but when did that ever matter with a new bike!The biggest question is do you need the bike?
It isn't a bike I can get through my LBS and there is no 'last years model' to be discounted (no prizes for guessing what I want 😉 )
I think what is really putting me off is that much of the tax savings appear to be going to a private company for doing a bit of paperwork and isn't in the (presumably) well intentioned spirit of the scheme.
I must be getting a social conscience in my old age! 😆
You're expecting a fair bit of snow on your commute then? 😉
That's my justification for it. Essential worker, with a big hill between me and work, I don't have a 4 x 4 and sometimes those gritters leave too much sand on the roads 😉
the (cynics version) of the aims of the scheme.
Increase spending
Give middle britain a tax break/sweetener
Make some people some money
end of long list
Increase Cycling