Car leasing, no deposit

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

BuyaCar team
Apr 24, 2019

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

Leasing is essentially a long-term rental agreement that generally requires lower instalments than other finance options. At the end of the term, you return the vehicle.

Leases often require an initial payment before the car is delivered. This is typically 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.

BuyaCar doesn't offer car leasing with no deposit, but you can choose a similar option with personal contract purchase (PCP) finance. This is available with no-deposit and affordable car repayments, bringing many of the benefits of leasing, and adding extra flexibility.

Unlike leasing, you can also use PCP finance for a used car. 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. This is referred to as depreciation.

At the end of the agreement, 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 people 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 56098 cars on BuyaCar eligible for PCP finance, with finance repayments starting from £67 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.

Car deals for under £150 per month                    


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