Can a bike save you money?

As a cycling novice, I'm trying to find out if it's really such a good idea in practice and if it'll save me any money.

In an effort to save money and get some free exercise, I started cycling a few weeks ago and so far, despite a few hairy moments, it’s working out pretty well.

Before I started, I worked out I could save quite a bit as I would no longer have to fork out for a monthly Oyster card or gym membership. It’s also an easy way to get places quickly, and much better than spending 30 minutes (if everything’s running) on a packed bus or train.

However, as good as the benefits are, there are a lot of upfront costs to factor in such as the bike, helmet and locks as well as the problems of bike theft, which saw an 8% rise in July according to Halifax.

So when looking at all the costs, is cycling a cost-efficient alternative mode of transport? Or do the cons mean you’ll end up paying our more in the long run?

Upfront costs

The main thing you’ll have to buy is your bike and you can either do this upfront if you have the cash, or you could go through a cycle-to-work scheme – if your employer has signed up to this. Under this scheme your employer buys the bike and you pay back the cost each month.

The big advantage is that you won't have to pay any tax on the bike and most people will save around 32% off the cost of a brand new bike doing it this way.

If your employer isn’t signed up, details of how to get started can be found on the Cycle Scheme website.

Extra costs

Along with the bike, you’ll also need front and back lights, locks and a helmet. Any extras you get on top of this will also add up such as a pannier rack and bag if you’re carrying lots of stuff around, light weight waterproof clothes and high-visibility clothes for cycling at night. Instead of buying this brand new, look on websites like ebay and gumtree first.

Once you’re set up and raring to go, you also need to factor in the cost of keeping your bike in good condition. Most need a service (around £60) every 18 months, but if something goes wrong before then, you’ll need to factor in extra costs for getting this fixed. Luckily most local councils run free or low-cost bike workshops and they’ll fix it for you for no cost.

Bike theft

Sadly, bike theft happens all too frequently, but there are a number of things you can do to reduce the risk.

When you get your bike, keep all receipts and official documents in a safe place and take photos to give to your insurance provider if it’s stolen.

Also register it with the police and upload photos and as much detail as possible about your bike. That way if it does get stolen you’ll be able to flag it on the online database and if the police recover it, they'll be able to return it to you.

To avoid theft, you need to use some common sense and always lock up your bike. The kind of lock you have will also give you more protection, so avoid very thin locks which can be cut quickly.

Instead make sure the lock has a silver or gold ‘Sold Secure’ rating and if your bike is valuable (£500 upwards), use two different types of lock, such as a D lock and a chain.

Always avoid leaving the bike out overnight, and when you are out leave it in a well-lit area, preferably with other bikes.

Insurance

Getting insurance is probably a good idea as it will save you money if your bike is stolen. However, you need to read the small print first as many policies will require you to use specific bike locks and some will only cover your bike when it’s inside the house.

Watch out for the ’new for old’ wording as although some insurers like Endsleigh will replace the bike for a brand new version, many will only give you the value of the bike at its current age.

There are two options when it comes to insurance; buying a standalone policy or adding the bike to your existing contents insurance.

Standalone insurance

On the whole I’m not a fan of getting specialised insurance, as it usually ends up being quite expensive and not paying out when something gets stolen. However, the benefit when it comes to bikes is it’ll cover especially expensive models (£2,000 upwards) and you’ll also be covered for public liability cover which is very useful if you damage someone else’s property or hurt anyone else when cycling.

But as the odds of this happening are extremely low, it's unlikely you'll need it. There are also other schemes, like the London Cycling Campaign, which costs £34 a year, or CTC for £39 a year for those out of London, which will give you free third-party and public liability insurance when you join.

Contents insurance

You can add a bike to your contents insurance and depending on the cost of the bike you may have to pay something extra for this service. Ask your insurer first, and check the small print so you're aware what's covered and what isn't.  This is generally a cheaper option but remember that your premiums will go up when you make a claim. You can see a full list of available contents insurance polices on our comparison table.

How much can you save?

This really depends on your own situation. If your commute is short enough and you can cycle for all or part of it, it's likely it will save you money in the long run as the upfront costs you pay will be less than whatever you're shelling out for transport or parking costs.

However, you need to use it often enough to make your money back including days when it's raining heavily or cold outside. My efforts so far have worked, but I'm not too confident they will be as successful in mid-winter.

Would you give up your car or train journey for a bike ride?  Do you think cycling is the best alternative to pricey commuting costs (if the journey distance allows it)? Let me know in the box below.

More on insurance:

The ten most unusual forms of insurance

Home insurance: the features you can't do without

Home insurance: what you can't claim for