Zero deposit car finance
Zero deposit car finance lets you get a car without putting any money down upfront. Rather than saving for a deposit before you can buy, the full cost of the vehicle is borrowed and repaid in monthly instalments. This guide covers how no deposit HP finance works, what it actually costs compared to paying a deposit, who qualifies, and what to think about before applying.
Zero deposit car finance is exactly what it sounds like: car finance with no upfront payment required. You borrow the full purchase price of the vehicle and repay it over an agreed term in fixed monthly instalments. There is no lump sum to find before driving away.
This is different from how some car deals are structured, where a deposit is expected either to reduce the loan amount, secure the vehicle, or both. With no deposit finance, none of that applies. The full amount is financed from day one.
At AutoMoney Trust, no deposit is required on any hire purchase agreement. You can borrow between £4,000 and £25,000 over 36 to 84 months with nothing to pay upfront.
Under a hire purchase agreement with no deposit, the lender advances the full purchase price of the vehicle to the dealer. You then repay that amount, plus interest, in equal monthly instalments over the agreed term. The interest rate is fixed, so the payment stays the same every month.
At the end of the agreement, once all payments have been made, you pay a small option to purchase fee (typically around £100 to £200) and ownership of the vehicle transfers to you. Until that final payment, the lender retains legal ownership of the car.
Use our car finance calculator to see what monthly payments look like at different loan amounts and terms before you apply.
Yes, no deposit car finance is available to people with poor credit, CCJs and defaults. Because the loan is secured against the vehicle under a hire purchase agreement, lenders who specialise in poor credit can take on more risk than they could with an unsecured loan. The car provides security for the lender, which is part of why a deposit is not always required.
The interest rate offered will reflect your credit history. Applicants with adverse credit will typically be offered a higher rate than those with a clean file, which affects the total cost of the agreement. This is worth factoring in when comparing options.
AutoMoney Trust considers applications from people with poor credit, CCJs, as well as those on part-time employment. For more on how poor credit affects your application, see our guide on car finance with a CCJ.
In the short term, no deposit finance is cheaper because you have nothing to pay upfront. Over the full agreement, it costs more than finance with a deposit because you are borrowing a larger amount and paying interest on the whole purchase price from the start.
A simple example: on a £10,000 car at 20% APR over 60 months, financing the full amount with no deposit results in a higher total repayable than financing £8,000 after putting £2,000 down. The monthly payment is also higher because the loan is larger.
Whether that trade-off is worth it depends on your situation. If you do not have savings available for a deposit and need a car now, no deposit finance gets you on the road without delay. If you have savings but they are earmarked for something else, the same logic applies. The question is whether the additional interest cost over the term is acceptable given your circumstances.
For more on how the loan term affects total cost, see: How does the loan term affect my payments?.
With some lenders, yes. A deposit reduces the amount being borrowed relative to the value of the car, which lowers the lender's risk. For applicants with poor credit, a deposit can sometimes make the difference between approval and refusal, or result in a better interest rate being offered.
With specialist poor credit lenders who offer no deposit finance as standard, a deposit is not required for approval. It may still reduce the monthly payment and total interest paid, but it is not a condition of the agreement. If you have money available and want to put it toward the car, you can, but you are not penalised for not doing so.
Some lenders advertise low deposit rather than zero deposit finance. This typically means a small upfront payment is required, often between 10% and 20% of the vehicle's purchase price, before the remaining balance is financed.
Low deposit finance reduces the loan amount and therefore the total interest paid, but it does require some upfront funds. No deposit finance requires nothing upfront but costs more over the full term. The right choice depends on whether you have money available and how you want to balance upfront cost against monthly outgoings and total interest.
If you want to compare the two side by side for a specific vehicle, our car finance calculator lets you run different scenarios to see how the numbers change.
No deposit car finance from AutoMoney Trust is available to a wide range of applicants. You do not need a perfect credit history, and the following are all considered:
Applications are assessed individually based on your full financial picture, not just a credit score. The initial check is a soft search that will not leave a mark on your credit file.
Start your application on our apply for car finance page. The process takes a few minutes and you will get a decision quickly.
AutoMoney Trust finances used cars purchased from FCA-authorised dealers. The loan range is £4,000 to £25,000, which covers a wide range of used vehicles. You find the car you want to buy, and we handle the finance. There is no restricted list of makes or models, as long as the vehicle falls within the loan range and is purchased from a qualifying dealer.
If you are looking for ideas on what to buy within a specific budget, our guide on the best second-hand cars to buy covers a range of options across different price points.
The end of a no deposit HP agreement works the same way as any HP agreement. Once all monthly payments have been made, you pay the option to purchase fee and the car is yours. There is no balloon payment and no large final sum due. The agreement is fully paid off through the regular monthly payments.
This is one of the advantages of HP over PCP. With PCP, lower monthly payments are offset by a large balloon payment at the end if you want to keep the car. With HP, you own the car outright at the end of the term with no further payment beyond the option to purchase fee.
For a full comparison of how HP and PCP work at the end of an agreement, see the FAQ: Hire purchase vs PCP.
Your loan term directly affects both your monthly payments and the total cost of borrowing. A longer term, such as 60 or 84 months, spreads the cost over more payments, lowering the monthly amount but increasing the total interest you pay across the agreement. A shorter term, such as 24 or 36 months, means higher monthly payments but a lower overall cost. AutoMoney Trust offers terms from 24 to 84 months, so you can balance monthly affordability against total cost. Use our finance calculator to compare different term lengths before applying.
On a Hire Purchase agreement with AutoMoney Trust, legal ownership of the car does not transfer until you have made all monthly payments and paid the £199 Option to Purchase Fee at the end of the term. Until that point, the vehicle remains the property of AutoMoney Trust, which means you cannot legally sell or modify the car without our agreement, and the car may be at risk if payments are missed. You are still responsible for tax, insurance, MOT, and maintenance throughout the agreement. Once the final fee is paid, ownership transfers and the car is fully yours.
A fixed rate keeps your interest rate and monthly payments the same throughout your agreement, giving you predictable costs from start to finish. A variable rate can rise or fall during the term, usually tracking the Bank of England base rate or the lender's standard variable rate, which means your payments can go up or down. AutoMoney Trust offers fixed interest rates only, so you know exactly what you will pay each month. Fixed rates provide certainty but may start slightly higher than introductory variable rates; the trade-off is protection from future rate rises. For more detail, read our guide on What Is Car Finance APR?.
Car finance can affect your credit score in both directions. Consistent, on-time payments build a positive credit history and may improve your score over the life of the agreement, demonstrating to future lenders that you can manage credit responsibly. Missed or late payments have the opposite effect, they are reported to credit reference agencies and can lower your score, making future borrowing harder or more expensive. Applying for finance also creates a hard credit search, which may cause a small short-term dip. Settling your agreement in full further strengthens your credit profile. For more detail, read our guide on Credit Checks for Car Finance.
