Most people think that a finance agreement requires some kind of deposit. After all, in many areas of life, this is the norm. House deposits are usually required for a mortgage, while you’ll look to put money towards other larger items in order to secure a finance agreement. However, there is a way to get a finance deal on a car without requiring a deposit. Here, we’re going to take a look through what you need to know about buying a car this way.
What is no deposit car finance? - Basically, it gives you the option to take out finance on a car without having to put any money towards it beforehand. Though you’ll pay more in monthly payments than if you had a deposit to contribute, it’s still a great way of getting into a car.
What’s the benefit of doing it? - Taking out a finance policy without a deposit means that you don’t need to save a sum of cash to put towards a new car. This gives you the freedom to get into a new car more quickly than you otherwise might, which is really handy if you’re in a jam and need to get a new car sorted immediately.
Are there any drawbacks? - As we mentioned, because you wouldn’t be putting any money towards your finance agreement you’ll likely pay more in monthly payments by comparison. However, that doesn’t necessarily mean that your monthly payments are going to be sky-high and you’ll still be able to find a good deal if you shop around. Remember that since you’re paying more in finance payments you’ll be charged more interest - so you’ll likely end up paying more overall compared with if you’d put a deposit towards it.