Want a new bike? Think about leasing

Good deals on Eddy Merckx EMX-3s via the Bike Leasing Company

by   August 10, 2012  

Eddy Merckx EMX-3 Athena

Here at road.cc, we're always on the lookout for great deals for you. We've been following the progress of an innovative company that gives you a great way to get your hands on a high-end bike.

Bike Leasing Company are all about helping you to enjoy your dream bike. We think leasing is an eminently sensible option to consider for your next bike. It's safe as well because there are no extended tie-ins in case your circumstances change – which is a real risk in the current economy.

If you're the kind of person that likes to get a new bike every couple of years then it could make sense to look at leasing: you pay monthly and get to ride something shiny. The value of the lease is calculated on the price of the bike minus its resale value after the lease period – commonly 30% of the RRP. After the lease is over you can either buy the bike for 35% of its value (so you're effectively paying 5% for the two years of credit) or give it back and get something new.

Anyway, the chaps at the Bike Leasing Company have contacted us to let us know that they have a limited number of 2012 Eddy Merckx EMX-3s available with either a Campagnolo Athena or Centaur build. The good news is that they can be leased over two years at almost 40% less than RRP with nothing to pay for the final nine months. That means that even if you decide to buy at the end of the lease, you'll still pay less than RRP. Here are the details:

2012 Eddy Merckx EMX-3 Athena build
Deposit of £419.85
followed by 4 monthly payments of £248.41
followed by 12 monthly payments of £27.68

2012 Eddy Merckx EMX-3 Centaur build
Deposit of £359.85
followed by 4 monthly payments of £206.91
followed by 12 monthly payments of £25.72

As well as being covered by the normal warranty, the Bike Leasing Company offer a parts replacement service for the bits that wear out: if you want to replace any worn components you can get them direct for the trade cost plus VAT, saving you a bit more money.

For all the details, head to the Bike Leasing Company website. 

3 user comments

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Alternatively, buy an EOL bike on sale for 30% - 50% less than RRP and pay 30% - 50% less than RRP, owing nothing and still having the resale value.

Go figure.

posted by batch [60 posts]
11th August 2012 - 0:08

3 Likes

batch wrote:
Alternatively, buy an EOL bike on sale for 30% - 50% less than RRP and pay 30% - 50% less than RRP, owing nothing and still having the resale value.

Go figure.

You are of course totally dependent on the manufacturers having screwed up and having over supplied a model. Something you may or may not have noticed is far less common than it used to be, to the point of many bikes being unavailable long before the end of the model year.

mrmo's picture

posted by mrmo [1143 posts]
11th August 2012 - 0:22

1 Like

Hello,

I thought it might help if I explain where we are coming from with our proposition:

First and foremost, we exist to make expensive bikes more affordable. You'll likely notice that most of our current model year bikes are available to lease at 30% less than the RRP, all year round!

Secondly, we help people to keep up to date with the latest models and technologies in an affordable way and without the hassle often involved with trying to sell a second-hand bike.

Often, end of line (EOL) models are only available as a cash purchase and as mentioned above, in limited frame sizes. Of course, there are credit card offers out there, but all of these carry a "charge"; so either way, if you haven't got the cash set aside, you will pay interest in one form or another.

Leasing gives people a way to spread out the costs and often to have more flexibility on size options.

Also, it might be worth considering a scenario where a customer keeps leasing EOL models every 2 years. This way they would keep spending 40% less than the RRP and achieve the same objective as you set out above, Batch, without tying up their precious cash in the bicycle from day 1.

We structure the payments the way that we do to be a responsible lender. We help people to avoid putting debt on the "long finger".

The higher payments are for a shorter period in the beginning so that the remaining payments are very low.

It is difficult to predict the future, but it is reassuring to know that future lease payments are easily affordable and make little impact to your household's cashflow.

A concern raised by potential customers about leasing is that the bike is not owned by them. I had an intersting discussion about this at the Bike Show in Excel, London in January this year.

It is true to say that if you keep leasing a bike, you do not own it. It is also true to say that if you buy a bike, of course, you own it.

However, taking a longer view on the situation and considering what happens when an individual wants a new bike:

If they buy one, they will usually have to sell the old one to afford the new one. So, effectively, before they buy their next bike, they will not own the bike. (No difference to leasing there)

If it's a current model year bike they will have paid most or all of the RRP if its a high-end model. They will have tied up their cash in the bike and have taken on the risk of releasing a good proportion of it when they come to sell it.

Importantly, they will also have taken on the risk of releasing this cash WHEN they want to get their next one as well.

We take all or most of this risk with leasing. You can choose to keep updating your bike, or you can choose to buy it at the end.

The cash that would otherwise have been tied up in a purchased bike can be put to other uses.

If the option to purchase was selected at the end of the lease, it is correct to say that a degree of interest will have been paid (typically 5-6%)

It is worth considering this interest against
1 - the cost of borrowing money if you cannot make use of a 0% finance option (the banks only apply low interest rates if you borrow a large amount of money over a long period)
2 - the risk of being tied into a 0% option if your job situation changes, and the impact on your credit file if you're rejected for 0% finance (many companies attract customers with offers of 24 month or 36 month 0% finance options that in reality are only available to customers with credit scores in the very high 900s)
3 - the fact that becoming a leasing customer lets you buy replacement parts and accessories such as helmets and locks at trade prices plus VAT
4 - the actual costs of selling a second hand bike on sites such as e-bay etc which typically charge a 10% success fee (up to £75)

Also, remember, if you're self-employed or an SME, there is even scope for tac savings with leasing.

I hope that clarifies a few things. Feel free to get in touch if you've any more questions via our website.

posted by bikeleasingcompany [33 posts]
11th August 2012 - 11:31

3 Likes