Do I Need a Deposit for Car Finance?
Looking at car finance but wondering if you need to put money down first? It’s one of those questions that comes up all the time, and honestly, the answer might surprise you.
The truth is, while deposits can be helpful, they’re not always necessary. Let me walk you through what you actually need to know.
What exactly is a car finance deposit?
A deposit is simply money you pay upfront when you’re getting car finance. It goes towards the total cost of the car, which means you’ll need to borrow less. Sometimes this can bring your monthly payments down a bit.
Here’s what many people don’t realise though – plenty of lenders don’t actually require a deposit at all. Some even specialise in deals where you don’t need to put anything down.
Do I definitely need one?
Not necessarily. It really depends on the type of finance you’re looking at:
With Hire Purchase (HP) or Personal Contract Purchase (PCP) deals, you’ll often see deposits mentioned, but they’re not always compulsory. No-deposit car finance is actually pretty common these days, especially if you go through brokers who work with lenders that focus more on whether you can afford the monthly payments rather than how much you’ve saved up.
If you don’t put down a deposit, your monthly payments will probably be a bit higher, but that’s often manageable depending on your budget.
Why would I bother with a deposit then?
Fair question. If you’ve got some cash available, there are a few reasons why you might want to use it:
Your monthly payments will be lower since you’re borrowing less money. It can also help with getting approved, as it shows you’re serious about the purchase. In some cases, you might pay less interest overall too.
But don’t worry if you haven’t got anything saved up – loads of people get car finance without putting money down first.
What if I genuinely can’t afford a deposit?
You’ve still got options. At Motorly, we work with lenders who offer finance without requiring any upfront payment. It’s designed for exactly this situation.
You’ll still need to pass the usual credit and affordability checks, and your monthly payments might be slightly higher, but the focus is on your income and credit history rather than your savings account.
How to improve your chances without a deposit
If you’re going down the no-deposit route, here are a few things that can help:
Work out what you can realistically afford each month before you start looking. Check your credit score so you know where you stand – some lenders are more flexible than others. Think carefully about which car you choose – something that holds its value well and isn’t too expensive can make approval easier.
If you’re concerned about your credit or income, adding a guarantor might be worth considering. And honestly, working with a broker like us can make the whole process much smoother since we can match you with the right lenders for your situation.
The bottom line
While having a deposit can be useful, it’s definitely not essential. Whether you’ve been saving up or you’re starting from scratch, there are still plenty of ways to get the car finance you need.
The key is finding the right deal for your circumstances and budget.
Ready to see what’s available to you? You can check your eligibility in just a few minutes – no deposit required and it won’t affect your credit score.