No Deposit Car Finance

In a nutshell, it’s taking out finance for a car without putting down a lump sum at the start. If you don’t have any money to put down, then no deposit car finance is one of the best ways to spread the cost of buying a car. There may be numerous reasons why you can’t get a deposit together, but that doesn’t mean you can’t be in the market for a car. It’s especially useful if you need to replace a car quickly, and don’t have time to raise a deposit, or you have other big expenditures at the same time. 

By taking out car finance with no deposit, you’ll just pay the value of the car, plus interest, over regular monthly payments, although your payments will be higher than they would be with a deposit as you’ll be borrowing more.

People sometimes pay a deposit when they get car finance; in some instances, it can help with getting an approval from a lender and helps reduce monthly repayments.

But we know it’s not always possible to save for that upfront cost. Fortunately, with Zuto, getting no-deposit car finance is as simple and straightforward as getting any other type of car finance.

1. Apply for a quote: Fill in your details and we’ll search our panel of lenders. We’ll then get in touch to discuss your £0 deposit car finance options.
2. Pick your car: Choose from over 40,000 cars from a Zuto-approved dealership, or you can find your own car. We’ll run a free vehicle and history check on any car you choose.
3. Start driving: If the agreement works for you, the lender will run some final checks; make sure you’re happy to proceed. We’ll arrange to pay the dealer and then you just need to pick up the car.

Having bad credit and no deposit, doesn’t necessarily mean you can’t get car finance. Zuto works with a number of specialist lenders who consider all credit histories. It may be that you’ll pay a higher APR or interest rate as a result, but you may still be able to buy a car and we’ll happily search our lenders for you. If you’re able to put together even a low deposit, it will reduce the amount of borrowing required, and your monthly payments.

As a buyer with no deposit, you still have plenty of options available. As always, it’s worth considering what your budget is and what monthly payments you can afford, factoring in running costs. Nearly new cars may have fewer miles on the clock, but they’re usually more expensive and will require more borrowing and higher repayments. Used cars tend to be cheaper, and so will require less borrowing, and therefore repayments will be lower, also without any upfront cost.  

If you’re concerned about negative equity in your car, then a deposit is a good way to protect against that. By paying a lump sum towards a car, the amount you’re borrowing will actually be less than the car is worth. Equally, even a small deposit may make a difference to what cars you can access, depending on what the lender is prepared to offer you. If a lender will only finance you for £9,000, but you want a £10,000 car, you’ll either have to find a £1,000 deposit, or settle for a £9,000 car instead.

Your main finance options will be Hire Purchase (HP) and Personal Contract Purchase (PCP). With HP, the car’s value is split into a number of equal chunks, depending on the length of the finance contract, ranging from 12 to 60 months. You pay for the cost of the car, plus the interest, and when you make the final payment, the car is yours. 

PCP is different. Again, you make regular monthly payments, but instead of paying off the value of the car, you pay off its depreciation. The depreciation is the difference between what the car is worth at the time of purchase and at the end of the contract. Once the contract is up, you have several options. You can give the keys back, you can make what’s called a ‘balloon payment’ to own the car or, if the car is worth more than expected at the end of the contract, you can use the excess towards a deposit for another car.

Zuto works with a panel of lenders who can offer no- or low-deposit car finance. Whether you apply online or talk to our team, we’ll be able to discuss your options with you; together, we’ll find suitable car finance deals, no deposit required. We also work with lenders who specialise in bad credit car finance. 

In theory, there’s no set limit to how much you can borrow without a deposit. Each application is considered on its own merits, which means we’ll run a tailored search, based on the amount you want to borrow and your credit history, to find lenders from our panel that can offer zero-deposit car finance.

A no-deposit car loan provides the flexibility you need to buy a new or used vehicle. Car finance options available include PCP, Hire Purchase (a type of finance where payments are based on the car's value), or a personal loan.

Advantages

• For cheap car finance deals, no deposit could be an attractive solution, with no need to make a payment upfront.
• You could get your new car quicker, as you wouldn’t need to save for a deposit.
• You could use an existing vehicle in part exchange as a deposit.

Disadvantages

• If you don’t pay a deposit, your monthly payments will be higher or the loan period may have to be longer.
• The total amount you pay will be higher than if you had paid a deposit, as you’ll be charged more interest.
• It may be more difficult to secure a no-deposit finance agreement without a good credit score.

No deposit car finance deals are a popular choice for car buyers, with flexibility based on a few simple requirements:

• Affordability: You need to be able to afford the monthly payments. By providing details of your income, lenders will be able to view your credit history. This will provide reassurances that you won’t have problems with the repayments. Use our car finance calculator for an idea of what you might be able to borrow.
• Age: You need to be over 18 and be able to provide some basic personal details, such as your name, age, and address.
• Extra information: The lender may sometimes ask for more information, but we will let you know if anything additional is required.

No-deposit car finance is really simple. Just apply online or get in touch with our team, to get the ball rolling.