The gross-net equation
People sometimes think that leasing a bike is more expensive than buying one outright. But, financially speaking, what is the best option for you as an individual? When you lease a bike, this is usually done through a ‘salary exchange’, a monthly fixed contribution from your gross salary or end-of-year bonus. For those leasing their bike through their employer in this way, the government provides many tax benefits. This is because neither you nor your employer pay taxes or NSSO on it. As such, the final amount you end up paying is less than if you were to purchase the bike with your take-home pay.
An example: you lease a bike package that includes an e-bike, theft insurance and a service budget worth €75 a year, worth a combined €5,000. All this over a standard 3-year lease term. You pay the €5,000 through your gross salary. But here’s the thing: due to the tax benefit, only €3,000 is deducted from your take-home pay, not €5,000. If you were to purchase this privately, you would pay the full €5,000 from your net salary.
What about spreading the cost?
Every so often, it is said that, ultimately, you pay just as much, if not more, for your lease bike than if you were to purchase it outright. But nothing could be further from the truth! While paying a lease in instalments may not allow you to immediately compare the two final costs side by side, by using our practical simulator, you can calculate exactly how much you will save with the additional tax benefit. What’s more, when you lease a bike and spread the cost, there is no huge one-off payment. This means that more people can access their dream bike.
Does your employer offer bicycle leasing through o2o? Then use the myo2o Biker tool to easily calculate how much it will cost you per month to get your dream bike and see how much you can save. Super handy!
There’s more to bicycle leasing than you think
By now, you’ll have realised that leasing a bike makes better sense financially. However, it’s not just the bicycle you’ll be saving on. You also get a complete package to enjoy your dream bike to the full, including all kinds of services and insurances. Think comprehensive insurance, breakdown assistance, accessories, service budget for maintenance and repairs, liability insurance, warranty insurance, etc. By buying privately, you often pay for these services separately, with no added tax benefit.
Conclusion: leasing a bike is the best option
It’s clear: leasing a bike is cheaper than actually buying one yourself. Once you’ve finished leasing as an individual and fully acquired your bicycle, you will have saved on average 40% compared to buying the same bike privately. Not only that, but you also enjoy the same tax benefit on accessories, maintenance and insurances.
So, forget the old misconception about bicycle leasing. Because leasing a bike over buying is a much better deal! Not sure which two-wheeler to go for? A reliable e-city bike? A spacious cargo bike? A fast speed pedelec? Find out what’s best for you with our bike guide and choose your dream bicycle for your commute.
Want to lease a bicycle through your work?
Is your employer an o2o customer? Then create your myo2o Biker account and calculate your exact net lease price.
Your employer hasn’t joined o2o yet? Then you will first have to convince your employer to become an o2o partner. Get the ball rolling with our handy white paper. Enjoy your dream bike!