Used cars with no-deposit finance

Buy now and pay later, with no-deposit car finance, which can help out when you don't have savings to spare

BuyaCar team
Aug 30, 2018

If you're buying a used car, then the chances are that it's available with no-deposit finance, enabling you to order and take delivery, without having to make any finance payments in advance - just a standard reservation fee.

It can be helpful if you find yourself suddenly needing a car, but without the savings to put down a deposit. You’ll typically have the car for a month before needing to make repayments, giving some breathing space if funds are tight.

Whether you put down a deposit or not, you’ll still repay the same amount of the car’s cost: the lower the initial payment, the higher your monthly payments will be.

No-deposit finance also involves paying more interest because you are borrowing the full cost of the car. In contrast, any deposit will reduce the amount that you borrow, cutting your interest costs.

Lenders require a strong credit score to take out no-deposit finance.


No-deposit car finance: how it works

All of the 59127 nearly-new or used cars currently advertised on BuyaCar is available with no-deposit finance. Once you have found a car that you like and reserved it with a £199 fee, you’ll need to apply for finance and then request a no-deposit quote.

As long as the application is accepted, you’ll take delivery of your car and the £199 reservation fee will be returned. There are normally 30 days from delivery until your first payment is due. You’ll then continue to repay the finance in monthly instalments until the end of the agreement.

No-deposit car finance: types of finance

The two most popular types of car finance offer the option of no-deposit finance.

The most flexible is Personal Contract Purchase (PCP) where monthly payments are kept low because they don’t cover the full cost of the car. You only replay the value that the car’s expected to lose during the agreement. This means that you can hand the car back at the end and walk away, or buy the vehicle for its remaining value. This can be refinanced.

If the car ends up being worth more than the cost of buying it, then you can trade it in and use the difference towards another vehicle.
Hire Purchase (HP) finance instalments are higher because you’re repaying the full cost of the vehicle. Once the final payment is made, the car is yours.


No-deposit used car finance: requirements

No-deposit finance isn’t for everybody because it does require a strong credit rating. That’s because lenders take a bigger risk at the beginning of the agreement, as the financed car starts to lose value before any repayments are made.

If a customer defaults on their payments, then lenders are more likely to be left out of pocket than with an agreement where a deposit was made.

Interest rates are typically slightly higher for no-deposit finance; this is another way that lenders cover the increased risk.

The higher monthly repayments also affect affordability tests, where finance companies ensure that a borrower has enough income to cover the cost of the car loan.

That's why it usually pays to put down a deposit of you can do so: you're more likely to secure a better interest rate and end up paying less in the long run.


No-deposit car finance: Which cars can I get?

Used car prices start at £4,150 on BuyaCar, with finance from £74 per month. You’ll need to budget for higher repayments with no-deposit finance as all of the example costs on the site assume a ten per cent deposit.

Brand new cars which have been built, but not registered, can also be bought with no-deposit finance from BuyaCar.

If you are considering a new car, we’ve listed the manufacturer no-deposit deals that are currently being offered. You'll need to configure a car and then ask for details about finance offers.

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