High street giant launches repayment plans for more expensive bikes – but at a cost.
Halfords has just launched a deposit-free finance scheme for its bikes.
You can spread payments if you spend over £399 on a bike and you can add as many accessories as you please. The cost can be spread over a 12- or 24-month period at an annual rate of 9.9%.
Research from YouGov indicates that 86% of cyclists rate the price as the most important factor when buying a bike. And thanks to the likes of the Olympics, the Tour de France and Wiggo, sales of adult bikes are up 7% year-on-year.
The scheme will be offered via in-store tablets at over 440 locations across the UK.
Example of spreading the cost
Buying a Carrera Kraken at £499.99 would set you back £43.83 a month (a total of £525.96) in repayments over a year or £22.95 a month over two years (a total of £550.80).
A Boardman Hybrid Pro at £999.99 would cost £87.67 a month for one year (a total of £1,052.04) or £45.90 a month for two years (a total of £1,101.60).
Cheaper ways to borrow
However, there are plenty of cheaper ways to borrow if you want to spread the cost of an expensive bike, particularly if you have a good credit rating.
Cycle to Work scheme
Your employer may offer this great Government perk – if it doesn't, why not ask if they'll join? Essentially, you buy a new bike through the scheme via a loan from your employer, which then deducts the cost from your monthly salary over a set period of time.
This not only allows you to spread the cost but also means your bike is tax free, which means it's much cheaper than the actual price you've paid!
Interest-free finance
Some bike shops offer interest-free finance, so it's worth shopping around. Of course, it's only worth taking advantage of this if the purchase price of the bike isn't significantly more than elsewhere.
Credit cards
A 0% purchase card is an interest-free way to borrow so long as you can pay off whatever you spend within the 0% period.
As the table below shows, the top cards offer up to 23 months with no interest to pay.
|
Credit card |
0% period |
Representative APR |
|
23 months |
16.5% |
|
|
20 months |
18.9% |
|
|
20 months |
18.9% |
|
|
Halifax Purchase Credit Card |
20 months |
18.9% |
|
19 months |
18.9% |
|
|
19 months |
18.9% |
|
|
Lloyds Bank 19-Month Platinum |
19 months |
18.9% |
*Annual fee of £24 applies; free to Santander 123 current account customers in first year
Compare 0% purchase credit cards
Fee-free overdraft
Some current accounts will give you overdrafts which can act as a small loan (up to £1,000).
The Nationwide FlexDirect Account gives you a fee-free overdraft for a year and a 50p daily charge thereafter, so it’s a cheap way of borrowing in the short-term.
And if you want to go really short-term, Santander’s 123 and Everyday current accounts offer 0% arranged overdrafts for four months, which then revert to charging £1 a day.
More on borrowing:
Multiple applications are hurting your credit score