No Deposit Car Finance

Yes. Lenders can offer car finance without requiring a deposit. While this may make the upfront cost more affordable, it may also raise the monthly amount you pay. Keep this in mind.
Lenders are more likely to offer no deposit deals to borrowers with better credit scores. You are also most likely to be accepted for a no deposit arrangement if you opt for a PCP finance deal rather than Hire Purchase.

Yes you can. Be aware, however, that being unemployed might make your lender wary about offering you finance and may increase the amount they charge for that finance (your APR).
It is possible to gain No Deposit Finance with income from a pension or from some, but not all, benefits. It is also possible to secure No Deposit Car Finance if you are self employed.

£0 Deposit Car Finance is a car loan where you are not required to pay a deposit or down payment in advance. The missing deposit is typically spread into the loan, increasing monthly repayments.
£0 Deposit Finance deals can be very useful if you need a vehicle but you don’t have savings but can cost more over the full term of the loan, and are likely to cost more every month.

Yes, you can arrange finance with a Joint Purchase Agreement, where two people agree to buy a car together. This decreases the risk for the lender and can make it more likely for you to be accepted for Car Finance.
In these arrangements, the car becomes the property of both signatories once the finance is paid off. You need to keep this in mind when it comes to selling or modifying the vehicle.

A deposit will bring down the monthly cost of buying or leasing a car but it isn’t essential. It can also make the finance you want easier to secure.

If you don’t have enough money set aside for a deposit and you need a car quickly, No Deposit Car Finance can be a practical choice. It depends on your needs. It’s worth assessing the pros and cons carefully in advance, however.

Essentially, a car finance with no deposit deal works exactly the way that it sounds. Any car finance deal that doesn’t include an upfront payment is considered a no deposit car finance agreement. This can save you from having to pay a hefty sum at the beginning of your finance agreement, making the entire process of applying for car finance more accessible and manageable right from the get go. And if you are worried that a no deposit deal will limit your choice on the type of car you obtain, rest assured this is not the case when you work with ChooseMyCar.

It’s important to understand, however, that due to the lack of a deposit, these finance deals often involve higher monthly repayments than other finance arrangements in which a deposit is agreed upon and paid upfront. In no deposit finance cases, it is also the case that a dealer may need some money in order to secure the vehicle – showing that you are a serious buyer.

After that, however, the car will be arranged either for pick up or delivery and you won’t need to pay anything further for the first 30 days of any new no deposit car finance deals. From this point forward, the regular monthly repayments of the agreed upon amount will begin and it will function just like any other car finance arrangement – albeit with higher monthly payments to be made.

Getting approved for no deposit car finance most often revolves around having a credit check performed. All lenders will need to perform credit checks and affordability checks before approving you for a no deposit finance deal.

It might go without saying that lenders are more likely to approve your no deposit finance application is you have a good credit rating and credit score, but it’s worth bearing in mind when choosing to apply for car finance. If you can take steps to improve your credit rating, it is certainly valuable to consider doing this before and during an application. A strong credit profile showcases to potential lenders that you are capable of paying off your debts on time and efficiently – any car finance lender will look at this in a positive light.

Why exactly is this a particular point of interest for no deposit finance car deals? It’s mostly around the face that your monthly repayments are gong to be higher on this kind of finance deal compared to other car finance options – raising the question for potential lenders of whether or not you will be able to meet these payments regularly. A lender will need to check the affordability and your reliability to make these monthly instalments in order to waylay these concerns and to avoid difficult situations further into your finance agreement.

The other requirements for a no deposit car finance deal are actually fairly straightforward. The main requirements include things such as being at least over the age of 18, being able to provide basic proof of address, driver’s license and financial supporting documents, and showing that you will be able to keep up with the repayments.

If you have an imperfect or bad credit score, it can be more difficult to have credit deals approved for purchases such as for a car or a home. Securing funds for these purchases is affected by your credit score, and when a potential lender runs a credit check on you it will inform on things such as:

• Whether to actually lend you money for a car finance agreement at all
• How much money they will be willing to lend you if approving your application
• The interest rate that will be applied to the full amount lent to you
• Perhaps the best way to think of it is to imagine your credit score as a kind of financial footprint. Your credit report and credit history will provide a record to car finance lenders as to your suitability for a new car finance agreement. This tells them how safe it is to lend you money.
• Missed payments, late payments and bankruptcy will all show on your credit history.

But what else affects your credit score? Things such as:

• Your current financial situation and personal circumstance regarding your debts
• Your active credit availability
• Your history of making credit payments and repayments
• Your presence on the electoral role
• Your past credit searches

When improving your credit score for a no deposit finance deal, consider the following:

Register to vote
There’s no reason not to do this one. Any finance company will run a credit check before making a decision. By registering on the electoral role you will make your name, address and other details more easily found – making their life a bit easier.

Make repayments on time
When avoiding a hefty deposit with no deposit car finance deals, your lenders will want to know that you can keep up with the higher monthly repayments and loan amount. By making sure that you aren’t missing current repayments and accumulating more debt, you can better prove your reliability and eligibility for these higher monthly costs.

Address any outstanding issues with your credit rating
The financial advisors here at ChooseMyCar always recommend that you review your credit score regularly and keep on top of things proactively if you are applying for a car finance plan. This gives you the opportunity to make sure that there aren’t any mistakes or errors on your record while taking steps to pay off current credit debt.

Not opening too many new loans
If you are planning on applying for no deposit car finance, it’s a good idea to carefully consider whether you are going to open any other new loans too. Opening a lot of loans at the same time can signal to car finance lenders that you may be in financial difficulty. Alongside this, consider closing unused credit accounts to clear them from your history and to increase finance provider confidence.