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 of £10 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.
The length of your car finance agreement can have a significant impact on both your monthly payments and the total cost of borrowing. Choosing a longer finance term, such as 60 or 84 months, spreads the cost of the vehicle over a greater number of payments. This can make your monthly payments more affordable, but it may mean you pay more interest overall throughout the agreement.
A shorter car finance term, such as 36 months, usually results in higher monthly payments because the balance is repaid over a shorter period. However, paying the agreement off sooner can reduce the overall amount of interest paid, making it a potentially lower-cost option over the full term.
When choosing the right finance term, it is important to consider your budget, monthly affordability, and how long you plan to keep the vehicle. The best option is one that allows you to comfortably manage your payments without putting unnecessary pressure on your finances.
AutoMoney Trust offers car finance terms from 36 to 84 months, giving you flexibility to choose an agreement that suits your circumstances. Use our car finance calculator to compare different term lengths and understand how your monthly payments and overall costs could change before applying.
With an AutoMoney Trust hire purchase agreement, legal ownership of the car transfers to you only after you have made all of your monthly payments and paid the £10 option to purchase fee at the end of the agreement. Until then, the vehicle remains the property of AutoMoney Trust.
Although you won't legally own the car during the finance term, you are responsible for its day-to-day running costs, including vehicle tax, insurance, MOT, servicing, and maintenance. As the finance provider owns the vehicle until the agreement is complete, you cannot normally sell, transfer ownership of, or make significant modifications to the car without our permission.
It is also important to keep up with your car finance payments, as missed payments could lead to arrears and, in some circumstances, the vehicle may be at risk of repossession if the agreement is not brought back up to date.
Once you have made your final monthly payment and paid the option to purchase fee, legal ownership transfers to you, and the car becomes fully yours with no further finance obligations.
The main difference between fixed and variable car finance rates is whether the interest rate can change during your agreement. A fixed interest rate means your rate and monthly car finance payments stay the same throughout the finance term, giving you certainty over what you'll pay and making it easier to budget. In comparison, a variable interest rate can rise or fall over time, meaning your monthly payments may change.
AutoMoney Trust offers fixed-rate hire purchase car finance only, so you know exactly what your monthly repayments will be for the full term of your agreement. While fixed rates may sometimes be higher than an introductory variable rate, they provide protection against future interest rate rises and make it easier to plan your finances with confidence.
When comparing car finance options, it's important to consider not only the interest rate but also the APR, total amount payable, and the overall cost of borrowing. For more information read our guide on What Is Car Finance APR?.
Car finance can affect your credit score positively or negatively depending on how you manage your agreement. Making regular, on-time payments can help build a positive credit history and demonstrate responsible borrowing, while late or missed payments can negatively affect your credit score and make it more difficult or expensive to access credit in the future.
If payments are not made on time, they may be reported to credit reference agencies, which can lower your credit score and make future borrowing more difficult or potentially more expensive.
When you apply for car finance, a lender may carry out a hard credit search, which appears on your credit file and can cause a small, temporary change to your credit score. This is a normal part of the application process and helps lenders assess whether finance is affordable and suitable for you.
For more information about how applications are assessed, read our guide on Credit Checks for Car Finance.
