Car leasing, no deposit

Low monthly payments with nothing to pay: how to get car leasing with no deposit

BuyaCar team
Dec 18, 2018

If you're looking for the lowest monthly payments on a brand new car, then leasing may well be the answer.

It's a long-term rental agreement that generally requires lower instalments than other finance options, and you return the vehicle at the end.

Leases normally require an initial payment before the car is delivered. This is often linked to the monthly payments - some deals require the equivalent of one instalment; others may require the equivalent of nine. In general, the more you pay upfront, the less you'll pay each month.

If you would rather pay nothing before receiving your car, then you'll need to look elsewhere. For no-deposit finance and affordable car repayments, personal contract purchase (PCP) finance could be your best bet, bringing many of the benefits of leasing, with extra flexibility, including when it comes to payments. Read on for more details.  


No deposit lease-type finance

Personal Contract Purchase (PCP) is a cross between leasing and more traditional forms of car finance.

Like leasing, you'll only make low monthly payments because these only cover part of the car's cost - the value that it's expected to lose during the agreement. At the end, you can return the car with nothing more to pay, but there's also an option to pay the remaining balance and own it. Many owners can also trade it in for another vehicle.

Unlike leasing, PCP is available on new and used cars. And depending on your credit rating, you may be eligible for no-deposit finance.

There are currently 58707 cars on BuyaCar eligible for PCP finance, with finance repayments starting from £66 per month. If you’re ordering your next car with BuyaCar, then you’ll need to pay £199 to reserve the vehicle. There will then be nothing more to pay for at least a month. The £199 deposit will also be refunded after your new car has been delivered.


Car leasing with no deposit - what’s the catch?

With no deposit to pay, you’ll have at least a month to save before your monthly repayments begin, and there’s no need to raid any of your savings to pay an initial sum.

However, you will be in a position where you won’t have paid off any of the car’s cost and this will mean that your monthly repayments will be higher than if you had put down a deposit.

You’ll also pay more in interest because you’ll be borrowing the full cost of the car; any deposit would have been taken off your loan.

Finally, you’ll also be in a position of negative equity for longer. This is where you owe more than the car is worth. It’s only a problem if you want to return the car early (you’ll need to pay the difference if the car is worth less than you owe), or if the vehicle is written off, as the insurance payout may not cover a like-for-like replacement, In that situation, Gap insurance can be of use.


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