Free-wheel on the cheap

Cut the cost of getting on your bicycle. It's the ideal time of year to buy a bargain bike and hit the road

Public health minister Caroline Flint ran into trouble on Wednesday, as she announced a new Government push to tackle Britain's obesity problem.

Flint said her main focus would be to persuade people to become more active, by getting them to build more physical activity into their daily routines - by cycling to work, for example. But Sustrans, the charity that promotes safe cycling, pointed out that its grants from the Government have been slashed this year.

In spite of the cut-backs, however, there's no doubt cycling is enjoying a boom. The number of riders was up 15 per cent year-on-year in 2005, says the National Cycling Network, with further gains so far in 2006.

One reason for the popularity of cycling is the relatively small amount of money you need to get started. You can be on the road, with a decent machine and all the accessories you need, for a few hundred pounds. And for many people, the one decent Government initiative designed to encourage cycling, the Cycle to Work scheme (see right), is really valuable.

The first decision to make is what type of bike to buy. If you're planning on riding to work, as well as doing some leisure cycling, a hybrid is a good option. It has the upright riding position of a mountain bike, but with thinner tyres and a lighter frame. Or consider a fold-up bike, which you can carry on public transport. Road bikes, meanwhile, with dropped handlebars are built for speed rather than commuting, while tourers resemble road bikes but are aimed at people who want to carry luggage and travel longer distances.

Try to set a realistic budget. A spokesman for Bike for All, the online resource for cyclists, says: "It is best to buy the best bike you can afford - it will last longer and will need fewer repairs in the long run."

Don't forget that your budget needs to include an allowance for accessories - see story below for what you'll need. Also build the cost of regular services into your plans. Evans, the bike shop chain, suggests annual overhauls of your bike to keep it in shape - it charges £55 for a service.

Cycling Plus magazine reckons September is just about the best time of year to buy a new bike - as long as you don't want the most up-to-date model possible. This is because bike manufacturers update their range at this time of year. Suddenly, bike shops are full of machines that are last year's model and they want to get rid of them. Discounts are widely available.

With the bike bought, the final expense to consider is insurance. This is not a luxury cyclists can afford to ignore. Figures from Churchill Insurance suggest that a fifth of bike owners have had experience of at least one theft, with more than 1.5 million bikes stolen in the past 12 months alone.

Richard Mason, director at price comparison service Insuresupermarket.com, warns: "If you're cycling to work as an alternative to using the car or public transport, consider how well insured your bike is, just as you would when parking a car all day."

Mason says there are two basic options. The first is to protect your bike under a home contents policy. Most insurers will allow you to add cycle insurance to their standard contents cover.

However, if you intend to insure your bike this way, check the premiums you'll pay when you first purchase contents insurance because costs vary enormously. You also need to check how much you'll be covered for under different sections of the policy. Typically, you'll be better off if your bike is stolen from your home, though there may be a limit on claims for a single item in a burglary. If your bike is stolen while you're out, the limit may be less generous.

The alternative is to take out specialist cover from an insurer that has specific policies for cycling. This is likely to more worthwhile if you have a more expensive bike, though don't assume you'll save money. Mason adds: "For a bike worth £800, a £90 premium with E&L Insurance is four times the price of the Esure.com premium, with the latter able to offer cover for a bike almost twice that value."

One area where specialist bike insurers are more likely to score highly, however, is on personal liability and third-party liability cover. This is the bit of your policy that covers you if you damage someone else's property - or someone else.

This type of insurance is important. Even minor damage to a car can cost several hundred pounds to put right, assuming you're at fault, while if you severely injure someone, the bill could be astronomical.

Kevin Mayne, director of the CTC, the cycling campaign, warns: "Although some household insurance policies offer a degree of third-party cover, many exclude road traffic." In some cases, the personal liability element of home insurance only applies while you're in the home.

The position is not entirely clear, however. Peter Staddon, a technical specialist at the British Insurance Brokers Association, thinks home insurance would almost always cover cyclists facing legal action from the other party in an accident. "Check to make sure, but I've not come across a policy where it would be excluded," he says.

The compromise option is to join an organisation such as the CTC or the London Cycling Campaign. Both offer third-party liability insurance for cyclists as one of the membership benefits. Joining the organisations costs, respectively, £33 and £32.

Finally, note that insurers will almost always expect you to have taken reasonable steps to protect your bike. If it's pinched because you left it unlocked while you were in a shop, your claim is likely to be rejected. Always lock the bike to something.

What it takes to get on your bike

* Getting started cycling needn't cost the earth. Warren Rossiter, of Cycling Plus magazine, says: "You can get perfectly sorted mountain bikes like Viper's TR1.0 for as little as £260.

* "Good city bikes such as Edinburgh's Revolution Courier '06 (£249) or the Ridgeback Cyclone (£299) come in at under £300, and expect to pay around £300 for a budget road bike such as the Claud Butler San Remo

* "If you want to race either on or off road entry level bikes start at around £600 - try the big names of Trek, Giant and Specialized first.

* "Budget folders can be had for £150, while £600 will get you a top end Brompton with extras.

* "Finally, Edinburgh, Revolution, Saracen and Dawes all make well regarded touring bikes for prices from around £500."

* Don't forget accessories. Basic necessities include a helmet, costing from £20, a decent lock, £40, front and back lights, from £10, a pump, from £5, and a puncture repair kit, which should cost £2 or £3

* Also get a basic multi-tool, with Allen keys to adjust saddles say, at around £5 to £15. Gloves and a weather-proof jacket will also prove invaluable, and you may have to pay extra for mudguards.

Get your boss and the taxman to share the cost

* If the only thing stopping you cycling to work is the lack of a reliable bike, try having a word with your boss. A little-known Government scheme enables employers to offer their staff cut-price bikes at very little cost to them.

* Cycle to Work was introduced in 1999 as part of the Government's Green Transport Plan. But the scheme has not been widely publicised and until recently, some annoying red tape put off employers. That's a shame, because Cycle to Work enables basic-rate taxpayers to get 40 per cent off the cost of a bike. Higher-rate taxpayers do even better, with a 50 per cent saving available.

* Under Cycle to Work, your employer is allowed to provide you with a bike to travel to work as a tax-free benefit - you can use the bike as often as you want for leisure, as long as you also use it to commute from time to time.

* You choose the bike you want. Your employer then buys it and leases it to you over a set period, which is typically from one to three years. At the end of this term, you can buy the bike to keep for a nominal payment, usually between 2.5 and 5 per cent of the original purchase price.

* You make big savings because each monthly lease payment comes out of your salary before tax and National Insurance have been deducted. You can even add the cost of a lock, a helmet, reflective clothes and bike lights to the deal.

* Imagine, for example, that you choose a bike costing £400, plus gear worth £100. Your employer pays, and is entitled to reclaim the VAT on the purchases, reducing the cost to £425.

* Lease the bike for a year, say, and you will pay about £35.50 a month. For a basic-rate taxpayer, making the payment out of pre-tax wages reduces the cost each month to £24, or £288 over the year. At the end of the year, you buy the bike and safety gear at 2.5 per cent of its original price - £12.50. In total, you get £500 worth of bike and kit for just £300.

* The easiest way for your employer to use Cycle to Work is via one of around 10 providers that run the scheme on behalf of companies. They include bike shops such as Halfords and Evans as well as several specialist groups.