Buy a car now and pay later: flexible finance

You can order a new car now with just a £199 deposit, and then nothing to pay for a month – here’s our guide to flexible finance

By BuyaCar team Oct 21, 2022

If you don’t have the cash to pay for a car outright and upfront - or even a large lump sum for a big deposit - you could still get one delivered to your door, with nothing to pay for almost a month.

If you’re looking for a car finance deal with no deposit, then here’s some good news: The most popular types of car finance are available with no deposit, including Personal Contract Purchase (PCP) and Hire Purchase (HP).

PCP offers comparatively low monthly payments and flexibility, since you only pay for part of the car’s value and you can hand the car back at the end of the term or make the optional final payment to buy it outright. With HP, you own the car once you’ve made all the monthly payments, which will cover the full cost of the car.

No-deposit finance does mean that you'll be paying more interest overall and higher monthly payments than if you put down a deposit - as you're effectively borrowing more - and you will need to meet the lender’s criteria to be eligible for this type of option. Scroll down for more information.

Buy a car now and pay later: how it works

If you’re taking out finance on a used or nearly new car, then you may be eligible for a no-deposit agreement. Once you’ve found a car, reserved it and applied for finance, you'll have the opportunity to request a no-deposit finance quote.

Successful applicants will have nothing to pay for at least a month. Once your car is delivered, you'll usually have 30 days before starting to pay your fixed monthly payment for the duration of the contract.

If you've paid a reservation fee, this is often taken off the price of the car, and subsequently factored into the monthly payments to make them that little bit lower.

Buy a car now and pay later: what’s required?

The most important factor with zero-deposit finance is a strong credit score. No-deposit finance is available to customers who have a good track record of taking out credit and repaying it on time.

All finance applications are put through an affordability check to ensure that drivers can afford monthly repayments. This is slightly tougher with no-deposit finance because your monthly payments will be higher due to the lack of deposit - meaning you'll have to be able to show that you can afford the higher monthly figure.

There’s a chance that you will be able to secure a better interest rate by putting down a deposit and starting to pay for your car immediately. Lenders usually see this as lower risk, as they get their money back sooner. You can request quotes for both situations when you apply for finance.

Which cars can you buy now and pay later?

Used cars, nearly new vehicles and pre-registered models, which are almost brand new, but have already been fitted with registration plates and are typically available for many thousands less than brand-new equivalents, can all be available with no-deposit finance.

Some brand new cars, which have been built but not yet registered to their first owner, will also be available with a buy now and pay later agreement.

If you are looking for a brand new car that's built to your specification by the factory, then you may be able to take advantage of no-deposit finance from the car manufacturer.

Types of finance available with a buy now, pay later agreement

You can choose from some of the most common types of car finance if you want to buy now and pay later. This includes PCP, which offers some of the lowest fixed monthly payments and is a flexible way to pay for a car.

At the end of the contract, you can either buy the car for a pre-agreed lump sum (known as the optional final payment or balloon payment), return it with nothing more to pay (provided it's in good condition and below the pre-agreed mileage limit) or trade it in for another model - depending on its value at the time.

With HP, your fixed term of monthly payments covers the full cost of the car, with no large final payment needed, so monthly payments are higher than with PCP but you automatically own the car at the end of the contract.