A lot of people find folding bikes relatively expensive compared to normal bikes. Of course folding is an added feature and requires more component parts and manufacturing costs than a non-folding frame. In return a folding bike offers numerous advantages for urban commuting, stowing away and overall flexibility in ones lifestyle.
In the UK the more expensive folders such as the Brompton, higher-end Dahons, Bike Friday and Birdy come into range under a special tax-saving government scheme. The purpose of the scheme is to encourage more people to commute to work on a bicycle and to sign up participating employers in the process. Once an employer has registered and allocated dedicated budgets to the scheme it is then possible for employees to apply for special finance.
Under the scheme an employee can apply for up to a £1000 voucher to purchase a bike and accessories and use it at a participating bike shop. A lot of employers use the Cycle Scheme intermediary at www.cyclescheme.co.uk. The voucher sum is them redeemed at the bike shop and normally repaid over 12-18 monthly installments on salary payroll. The employee then receives tax relief up to their highest rate. This can be as high as 40% for a higher rate tax payer. If the employer is also a private sector business the bike purchase is also exempt form 17.5% VAT (sales tax) . At the end of the load period the bike is still theoretically owned by the employer as if it were leased. To avoid a further taxable benefit and transfer ownership, the employee normally pays a nominal buy-out of between 5-10% of the purchase price. Overall this still represents substantial savings of up to around 50% on the purchase price and the equivalent of a on12-18 month interest free loan.
The implications for folding bikes? Higher quality ones do not come cheaply and this type of scheme puts many makes and models within the reach of commuters all over the UK. This is how I purchased my £800 Brompton in raw lacquer and additional accessories such as a front luggage system and Brompton bag. This would have represented a large chunk out of my normal monthly cash-flow otherwise. The advantages of a good quality folding bike are obvious and it has become very affordable as long as the scheme lasts. Long may it continue,
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