Discover how ‘no deposit’ car finance works - Representative APR 12.9% available
Securing finance for a car without having to pay an initial lump sum is a possibilty for many borrowers. But before making your application, find out if you are eligible for zero deposit car finance first with our helpful guide…
What is zero deposit car finance?
Not all vehicle finance deals require an upfront deposit - it is possible to secure finance for a car, van, or motorbike with nothing to pay before your monthly payments. Zero deposit finance - also known as ‘no deposit’ finance - can be an ideal solution if you don’t have the funds available to make an upfront payment.
How does zero deposit car finance work?
Sometimes paying a substantial amount upfront for your vehicle finance agreement simply isn’t possible - this is where zero deposit finance comes into its own. A no deposit car finance deal works in the same way as one with an upfront fee, but the amount you pay back each month and length of contract will vary.
Because of the risk involved for the lender, zero deposit vehicle finance deals can have a higher interest rate than traditional options. No deposit deals are also likely to cost you more per month than the likes of Personal Contract Purchase (PCP) because you are paying for the whole cost of the car during the agreed term, rather than part of the overall value of the vehicle.
Can I get car finance with no deposit?
Zero deposit vehicle finance isn’t necessarily available to everyone, so you’ll need to know what your current credit score is before you apply. No deposit finance is usually only accessible to those with good and excellent credit scores; this is because borrowers who fall into these categories tend to pose less of a risk to the lender.
To be eligible for zero deposit car finance, you must be able to afford the monthly payments agreed between yourself and the finance company and be at least 18-years-old or over to qualify.
If you want to find out more about your credit score and how you can improve it, then head over to the Credit Score section of our website to read our latest guides.
What are the pros and cons of zero deposit car finance?
When deciding whether or not no deposit car finance is the best option for you, first consider the advantages and disadvantages of this type of vehicle finance:
|What are the pros of zero deposit finance?||What are the cons of zero deposit finance?|
|No upfront lump sum payment is required||Interest rates may be higher than other forms of finance|
|Owning a car can become more affordable with this option||You may end up paying more than the car is worth|
|An opportunity to drive a higher-spec vehicle||Monthly repayments will be higher|
|A pre-agreed contract duration makes it easier to budget||Usually only available to people with a good or excellent credit score|
What details do I need to provide for zero deposit car finance?
To apply for zero deposit finance, you’ll be required to submit a series of personal and financial details which the lender will need to see in order to approve or decline your application. Some of the details you’ll be expected to share, include:
- Your full name, date of birth and marital status
- A copy of your driving licence
- Your current address and proof of residence via utility bills
- Employer’s name and address as well as job title and salary (previous employment details may also be required)
- Payslips or bank statements for proof of income (likely to be from the last three months)
- Self-employed individuals or sole traders will need to provide proof of accounts
- Details of any outstanding credit cards or loan agreements
How does the zero deposit car finance application process work?
Apply for zero deposit vehicle finance online in a matter of minutes. It’s easy to create a direct quote if you know the registration number and cost of the vehicle you wish to finance; simply click on the free finance quote generator which you can access towards the bottom of this page.
Zero deposit vehicle finance at your fingertips
Here at Octane Finance, we understand that a large number of our customers are looking for a vehicle finance solution that does not require an upfront deposit. Well, the good news is that over 80% of the car finance deals we broker don’t need a deposit payment - so you’re in good hands.
We aim to provide access to deals that give you as much choice as possible, which is why we facilitate zero deposit vehicle finance solutions on a daily basis. The good news is that the majority of lenders we work with in the UK welcome no deposit applications from our customers. Rates start from 9.9%, representative APR 12.9%.
Begin your vehicle finance journey with us today by speaking to our experts about your 0% deposit options.