Some car finance plans will have a no-deposit term attached to them. The immediate reaction is to assume that this would be a big positive, and it definitely is, but it isn’t necessarily as simple as that. Today, we’re taking a look at the pros and cons of car finance plans without a deposit included amongst the payment terms and conditions.
In terms of pros, the biggest positive is obvious: not having to pay a deposit means that there is no initial, sometimes larger-than-usual payment required prior to the plan officially beginning. This means that you won’t have to chase for more money than usual, even if only for that first month, allowing you to have a smoother transition towards a finance plan. It also makes the process more simplified knowing that you have a fixed amount for so many months and that’s it, rather than an additional payment that may cloud the issue.
Another related benefit is that you may be able to consider more options for vehicles. If a car requires £200 per month, that could be within your budget, but if that includes an initial deposit of, say, £400, then depending on your income and other outgoings, that suddenly may no longer be feasible. Similarly, a higher-priced car that just about sits within your budget (for, say, £300 a month) may no longer be viable once you factor in a deposit. Take the deposit away, though, and you suddenly have more choice because while it may be difficult to find an amount in the mid-hundreds at short notice, having a month to find the money to pay a lower three-figure amount could be a real possibility.
When it comes to cons, the biggest one to remember is that, whilst a deposit amount may not be present in the plan, it often means that the amount you are paying per month will increase accordingly. How much it increases will ultimately depend on how much the car costs. But people may get confused and forget that the absence of a deposit will indeed impact the monthly fees, and that could be a sticking point for some drivers. You will end up paying the same total price regardless, but some would prefer to pay a larger sum to get it out of the way rather than having it split evenly across however many months the plan will run for.
Nevertheless, there is a real upside to entering a car finance plan without a deposit, and we have a ton of great options within these parameters. Check them out by heading on over to our No Deposit Option page here and all our cars on finance.
Want to know more? Call us on 01925 599079.
As part of our services we deliver the car to your premises of choice within the UK. Lately we have delivered cars in most major towns including the Southern cities & midlands: (London, Birmingham, Leicester), Northern cities (Manchester, Liverpool, Sheffield, Leeds, Newcastle), and Scottish cities (Edinburgh, Glasgow).