Cyclescheme

Also, there are a few complications such as the "value" banding (<£500 or £500>=) is based on the value of the bike and accessories, but not the helmet cost. So a £490 bike, a £20 lock and a £50 helmet would have an "equipment value" of £510 (the bike and lock).

If you can keep the cost of everything except helmet down to under £500 then it makes it a much better deal. If you had a £550 voucher to spend then £490 bike, £20 lock and £40 helmet is going to end up costing you a lot more than a £490 bike, £60 helmet and paying for the lock separately in cash.

To put this into real numbers:

£490 bike, £20 lock and £40 helmet.

£550 voucher (but £510 of it "equipment" and £40 is helmet) and so you pay £374 over the first 12 months (that's post tax, how much less you get in your pocket)

12 months: 25% of £510 = £127.50, so saving is £550-£374-£127.5 = £48.50
18 months: 21% of £510 = £107.10, so saving is £550-£374-£107.1 = £68.90
2 years: 17% of £510 = £86.70, so saving is £550-£374-£86.70 = £89.30
3 years: 12% of £510 = £61.20, so saving is £550-£374-£61.20 = £114.80
4 years: 7% of £510 = £35.70, so saving is £550-£374-£35.70 = £140.3

Now a £490 bike and £60 helmet, still a £550 voucher but "equipment value" is under £500 now. Also subtract the £20 in cash for the lock from the savings made.

12 months: 18% of £490 = £88.20, so saving is £550-£374-£20-£88.20 = £67.80
18 months: 16% of £490 = £78.40, so saving is £550-£374-£20-£78.40 = £77.60
2 years: 13% of £490 = £63.70, so saving is £550-£374-£20-£63.70 = £92.30
3 years: 8% of £490 = £39.20, so saving is £550-£374-£20-£39.20 = £116.80
4 years: 3% of £490 = £14.70, so saving is £550-£374-£20-£14.70 = £141.30

So, big difference after 12 months but then the saving trails off, but still always better to keep the equipment cost down under £500 in this case.