Buying a bike on finance: everything you need to know

So you’ve done your research and found the best bike for you and your needs. Now you just need to buy it.

Bike finance offers a flexible way of paying for your bike in monthly instalments, rather than all in one go, and many bike retailers offer this online and in-store. This guide focuses on UK retailers, but you'll find many similar options in other countries.

What is bike finance?

Bike finance enables you to purchase a new bicycle and spread the cost of paying for it across an agreed period of time.

Road bike finance, mountain bike finance and ebike finance are all available from the retailers we’ve included at the end of this article, so if you’re looking for a flexible way to purchase a quality bit of cycling kit, bike finance could be a good option to consider.

How does bike finance work?

Buying a bike on finance is usually available as an option on bikes costing upwards of £250.

Clearance bikes and bikes on sale are also often available to purchase on finance, so it’s worth checking out the sales as well if you’re looking for a cheap road or mountain bike.

On approval of your application to buy a bike on finance, you’ll often be asked to pay a deposit up front. This is usually around 10 per cent of the total price of the bike.

You can spread the cost of your repayments over the course of (in most cases) between three and 48 months.

Zero per cent interest deals are often available on shorter-term agreements.

Longer-term payment plans (usually upwards of 12 months) will mean lower monthly repayments, but they will usually have interest percentage rates added on top of the cost of the bike.

A quick note on terminology. 'Interest rate' and 'APR' are two terms often used within bike finance agreements that look similar (both are expressed as a percentage rate) but are completely different beasts.

• Interest rate refers to the flat charge on the amount of money loaned through your bike finance agreement
• APR is calculated using a complex formula (prescribed by FCA rules) and takes into account other credit charges and fees alongside interest rates

For example, a credit agreement subject to a zero per cent rate of interest may not automatically have an APR of zero per cent, because there may be other fees or credit charges under the agreement.

Pros of financing a road or mountain bike

The advantage of finance is that it enables a customer to spread the cost of a purchase via a series of affordable payments, rather than spend a lump-sum upfront.

Of course, regardless of whether you’re buying a bike on finance or outright, you should never spend more than you can afford.

Cons of financing a road or mountain bike

Unless your agreement is 0 per cent interest and 0 per cent APR, the downside of bike finance is that there will be interest and other charges to pay, meaning you may pay more over time than the original cost of the bike.

Like any contract, once you’ve applied, have been accepted and signed the finance agreement, you will be obligated to make the agreed monthly repayments, so only apply if you know you will be able to do so.

Late or non-payment will void any interest-free agreements. You will incur late payment interest and payment charges, and will end up paying more.

In serious cases, you could be taken to court by the lender. It can also seriously harm your credit rating, which could affect future credit applications, including mortgage applications.

So, again, we stress, don’t buy something that you’re unsure you can afford. Make sure you read the fine print of any agreement before signing to avoid any unexpected costs down the line.

Also bear in mind that you won't own the bike until you've paid off the balance of the loan. If you write off the bike or it's stolen, you'll still be eligible for the loan payments, so it's a good idea to look for bike insurance to cover your shiny new bike.

Bike financing through the Cycle to Work Scheme

If your employer is participating in a Cycle to Work Scheme, it’s possible to buy a new bike through it and save money by doing so.

With this scheme, you effectively ‘rent’ a bike from your employer tax free, and then buy it off them at the end of the loan period. Savings of up to 42 per cent on a full-priced bike are possible.

The main difference between this and financing elsewhere is that your repayments are taken directly out of your salary, so you will not pay tax or National Insurance on this sum.

There used to be a blanket £1,000 cap on what could be bought through the scheme, but the Department for Transport updated its guidance in 2019 and now allows employers to save on cycle to work packages in excess of £1,000.

It’s worth checking with your employer to see if there is a company cap in place.

Who is eligible for bike finance?

The specific terms may differ for each provider, but generally, to apply for bike finance in the UK you must:

• Be at least 18 years or older
• Be a permanent UK resident
• Be either: in regular employment, either full-time (16+ hours a week) or self employed, retired and over 50 years old with a pension, or in receipt of a disability allowance
• Be able to make repayments by Direct Debit
• Provide your previous address if you have lived at your current address for less than three years

Under Financial Conduct Authority consumer credit rules, every applicant for finance will be subject to an affordability assessment, which will involve an ID and credit reference check for anti-money laundering purposes.

If your application has been declined before, there’s no reason why you shouldn’t reapply. Be aware that repeated applications could severely harm your credit rating, however.

It’s widely recognised that circumstances change and your ‘risk level’ will be considered based on the information in your newest application.

How much can you borrow on bike finance?

Retailers acting as brokers give finance credit on purchases made costing upwards of £250. Some retailers offer finance up to £15,000.

You will be assessed on your ‘risk’ factor and what the likelihood is of you paying that amount back.

What else can you buy with bike finance?

Alongside interest-free or 0 per cent APR finance options for bikes, brokers often allow finance credit to be applied on bike components, accessories and technology costing over the minimum threshold (usually around £250 to £280).

It’s unlikely that the 0 per cent interest or 0 per cent APR will be available on these additional products if bought separately from the bike, so check the terms of the contract thoroughly before committing.

Buying an electric bike on finance

Electric bikes are great for a host of reasons, and you can now find one for almost any kind of riding; urban cruising becomes easier with commuter or cargo ebikes, and an electric mountain bike gives you extra oomph to tackle long days in the hills.

However, ebikes are still accompanied by a hefty price tag, so many bike finance brokers now offer ebike finance.

If you live in Scotland, you can also take advantage of a scheme funded by Transport Scotland with the Energy Saving Trust, which offers an interest-free loan of up to £6,000 to buy an ebike.

The repayment period is over four years and per household. It covers two ebikes (capped at £3,000 each), one family cargo or e-cargo bike (capped at £6,000), or one adaptive bike or ebike. There's a new scheme to be launched in summer 2023, which will allow you to purchase a used ebike with a loan.

Who offers bikes on finance?

Most major bike retailers provide the opportunity for you to purchase a bike on finance and act as credit brokers, rather than lenders.

It is unlikely you will be borrowing money from the retailer itself. V12 Retail Finance is the UK’s only specialised retail finance provider via its Ride It Away product, and most online bike retailers provide bike finance credit through it. Many brick and mortar bike shops also use V12 Finance.

The terms of bike finance vary from retailer to retailer, so shop around to find the terms that work for you.

• Evans Cycles: Offers finance on reduced and full-priced bikes costing upwards of £280, allowing you to spread the cost with 0 per cent finance for up to 12 months, with a 10 per cent deposit.
• Halfords: Offers flexible finance credit through partner Klarna Bank AB on bikes purchased in-store or online, and is regulated by the Financial Conduct Authority for the purpose of credit broking. Representative APR 0 per cent agreements are available on repayments made over three to 12 months, and a fixed representative APR 18.9 per cent will apply to repayments split across 24 to 48 months.
• Cyclestore: Offers 0 per cent finance on orders exceeding £250. You are able to qualify for six, nine, 12 or 18 monthly repayments or, if you exceed £1,000, you can apply for a 24-month 0 per cent finance agreement.
• Wiggle / Chain Reaction Cycles: Credit is available via PayPal Credit on selected bikes and components over £280. It's not shown on the order page, but is an option when you get to the payments screen.
• Tredz: Spend £99 or more on any items with Tredz and you could be eligible to spread the cost with finance with no up-front deposit. Short-term 0 per cent APR finance options are available on purchases over £250. For longer-term payment plans, 14.9 per cent APR applies. Zero per cent APR deferred finance is also available, so you can ‘buy now, pay later’. You can choose this option for 12 months if you spend £1,500, or three to six months on orders over £850. Spend over £2,500 and you could be eligible for zero per cent finance over 36 months. There's also a 'pay in three' option at zero per cent.
• Ribble Cycles: A V12 Finance calculator on the Ribble website allows you to choose your preferred finance type and personalise the deposit amount to pay upfront against the cash price during the application process for bike finance. Most retailers do not offer this flexibility from the off. The option to stagger payments is available for purchases over £350. You can pay this off over 24 or 36 months under Classic Finance at 14.9 per cent APR. Alternatively, you can apply for zero per cent finance over 6 months with a minimum £350 spend. Spend over £2,500 and you can apply for zero per cent finance over 12 months.
• Cycles UK: Cycles UK uses V12 Finance and you can apply for zero per cent finance for up to 12 months. There's a 10 per cent deposit, you can apply with a minimum spend of £300 and potentially apply for up to £15,000 credit. The standard rate of interest for loans that fall outside the zero per cent offer is 15.9 per cent.