No deposit car finance is a good example of a product that does exactly what it claims to do; it provides a way of purchasing a car without the need for the customer to put down a deposit.
If you’re considering changing your car because your lifestyle has changed, you need something different or just fancy something new, you may not want to drain your savings in order to get the particular car you want. Alternatively, you might not have had the opportunity to save towards the deposit for a brand new car or the perfect one for your growing family. You may simply be looking at all the finance options available to you before making your final decision. Whatever your reasons, you can consider no deposit car finance as a way to finance your next car without any large initial outlay.
By comparing no deposit car finance, you might discover an option that allows you to drive your chosen vehicle away without having to pay a hefty lump sum upfront provided that you’ve satisfied the finance company’s lending criteria and agreed on a payment schedule. This can be invaluable for those who need to replace or upgrade their car at short notice as it can often be arranged extremely quickly.
There are a few ways in which no deposit car finance can work to help you get the car you want. Our guide should enable you to make sense of the most common methods so you can make an informed decision when you are ready to compare no deposit car finance options and choose the one you feel is best for you.
Hire Purchase – With no deposit Hire Purchase (HP), you and the finance company agree to you driving away your chosen car without a deposit just an agreement in place that you will make regular monthly payments towards purchasing the car. The finance company retains the right to recover the car if you cannot maintain the agreed payments but other than that the car is yours to use every day. Once you make the final payment, you will own the vehicle.
Personal Contract Hire or Leasing – No deposit Personal Contract Hire (PCH) or leasing as it is commonly known, is different to hire purchase in that you are under no obligation to buy the car. This option is often chosen by those who want the convenience and luxury of a new car that often comes with lower repayments than if they were to commit to buying it. It is similar to hiring a car for your holiday but over a longer-term. As PCH also avoids the problem of the car depreciating in value over time, this can be appealing to some people too, although others may prefer methods that give them the option to buy. This type of finance is more commonly offered on new cars but can occasionally be found for second-hand cars too.
Personal Contract Purchase – You could describe Personal Contract Purchase (PCP) as a halfway option between HP and PCP. Those looking for a new car often choose this option because of the flexibility it offers. You can have low monthly repayments and at the end of the agreed term, you have a choice. You can trade the car in for a new car and new agreement, return the car with nothing more to pay or make the optional final repayment (usually substantial) to buy the car outright.
Once you have decided that you want a new car, we can help you compare no deposit car finance and find the deal that works for you. A no deposit car finance scheme could be a solution if you are looking to get your perfect car without having to save up or set aside the money for a deposit.
Before settling on the deal you want using our smart technology will help you see the Annual Percentage Rates (APR) the different finance companies are offering and how much you will repay over the term of the agreement.
Not having to find a deposit can make getting your new car more affordable. However, as there is no deposit deducted from the price of the car, you’re borrowing a larger sum which will mean that more interest is paid back over the full term of the finance agreement.
Make sure you are clear as to which type of agreement is being offered and if it covers what you want it to. Factors to consider include whether you will have the option to buy the car at the end of the agreement and if there are mileage and wear and tear conditions. Consider what amounts need to be repaid if you want to return the car early for any reason.
No-one is ever guaranteed finance but when considering whether to offer you no deposit car finance, lenders will look at your credit score, which is a record of how much credit you have outstanding and whether you have kept up repayments on your previous agreement. The better this score is you are more likely to be offered credit. They can also take into account how your monthly outgoings compare to your income to try to find an affordable payment for you.
Making a no deposit car finance comparison using Bright Loans smart technology couldn’t be easier. We’ll find you quotes in seconds and all you have to do is review, decide and apply – we’ll do all the hard work of the form filling for you, so you can have more time to choose which new car you want and think about where you’ll drive it first!