No Deposit Car Finance

A no deposit car finance deal can stop you from having to pay a hefty sum up front. This can make getting car finance a much more approachable thing to do. It also won’t limit you on the type of car you can obtain.

So how does it work?

Anyone can buy a car without a deposit. A dealer may need some money to secure the vehicle to show to them that you’re a serious buyer, but after that, the car will either be picked up or delivered and you won’t have to pay anything else for the first 30 days. After this, the repayment plan will kick in and you’ll start paying the amount agreed as part of your finance deal.

What car finance can I get with no deposit?

Most forms of car finance work with no deposit, but the two main options are a Hire Purchase (HP) or Personal Contract Purchase (PCP).

No Deposit Hire Purchase

While the monthly repayments can be higher, particularly with no deposit, you own the car outright at the end. This means you can do whatever you want with it come the end of the term. 

No Deposit: Personal Contract Purchase

While you won’t own your car at the end of it, PCP can make your repayment options more flexible and affordable. As you’re only paying off the cost of the car’s depreciation it can keep costs pretty low. 

If you’re interested in any of the above then check what you can afford using our car finance calculator, or apply for car finance with ChooseMyCar today.

If you can afford a deposit we’d still recommend using one if you can as this will make interest rates lower and can help avoid any difficulty with repayments.

What cars can I get with no deposit?

There’s no limit to the types of used cars you can drive with no deposit. Whether you’re after a used Volkswagen, a used Mercedes, a used Ford or one of the other brands we stock, there’ll be something for everyone. Basically, if the car is in stock with our suppliers then you’ll be able to grab it and get driving.

Requirements for No Deposit Car Finance

The main requirements a lender will need before approving your no deposit car finance are centered around credit checks and affordability checks.

Credit check for No Deposit Car Finance

Generally lenders are more likely to approve a no deposit deal when you have a good credit score. A strong credit profile will highlight that you can pay off your debts efficiently and lenders will look on this in a positive way. We are still able to offer bad credit car finance, however. 

Affordability checks for No Deposit Car Finance

As repayments will generally be higher when a deposit has not been paid at the beginning of an agreement, lenders may be more concerned about your ability to meet them. They will need to check that you can afford to make the repayments to avoid any difficult situations further down the line.

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Frequently Asked Questions

Generally paying a large deposit upfront can reduce the cost of your monthly repayments. This isn’t the case for every type of car finance however and in many cases no deposit is needed. We’ve put together a guide on no deposit car finance and on how much your car finance deposit should be.

The overall cost of car finance will vary depending on the type of car finance that you choose. 

The cost of getting a car on finance will be the overall cost of the car, plus any interest owed over the term agreed. 

For a personal contract hire agreement it’s worked out slightly differently; the amount you pay is calculated by the cost of the depreciation of the car over the term agreed. 

Some types of car finance may also include fees for excessive mileage, any damage to the car or a maintenance cost, so keep an eye out for this. 

If you want to find out what you can afford, check out our car finance calculator.

If you make all of your payments on time on your car finance loan, then it should have a positive effect on your credit rating. This will prove to lenders that you are reliable and will reflect well on you.

However, if you miss or fall behind on repayments it will have a negative effect on your credit rating and remain in your credit history for 6 years.

For more information read our guide on credit scores.

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