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Can you finance a car with no deposit?

No deposit car finance allows you to buy a car without paying anything upfront, helping you get on the road quickly while keeping your savings intact. This guide explains how it works, how it affects your monthly payments, and whether no deposit car finance could be right for you, including if you have bad credit.

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30.9% APR Representative

Can you finance a car with no deposit?

Getting a new car is an exciting milestone, but for many drivers, the financial hurdles can feel overwhelming. The biggest obstacle of all? The deposit.

We know that life doesn't always go to plan. Maybe your current car has broken down unexpectedly, you've started a new job that requires a commute, or you simply haven't had the time to save up a lump sum of cash. If you need to get on the road quickly but your savings account looks a little light, you might be asking yourself if you can buy a car on finance with no deposit.

The short answer is yes.

However, just because you can do it, doesn't mean you shouldn't check the details first. Skipping the deposit affects your monthly payments and the total amount you pay back, so it's important to understand exactly how it works before you sign on the dotted line.

In this guide, we'll strip away the jargon and explain the pros and cons of no deposit car finance, helping you decide if it's the right route for your budget.

You may be wondering...

What does no deposit car finance mean?

  • No deposit car finance allows you to borrow the full cost of a vehicle without paying anything upfront, making it an accessible option for people who need to get on the road quickly. If you’re looking for a straightforward way to secure a reliable vehicle without the immediate financial strain of a deposit, no deposit car finance could be a practical solution.

How does buying a car on finance work with no deposit?

  • In a traditional car finance deal, you are usually expected to pay a percentage of the car's price upfront. Typically, you make a down payment of around 10-20% and your lender covers the rest. But with no deposit car finance, you don't pay that lump sum. Instead, the lender covers 100% of the vehicle's price, and you pay that full amount back over the course of your agreement. It's important to understand that we can only value the car up to the retail price. So, if a car is for sale for £10,000, but our systems value the car at £9,500, you will either need a £500 deposit or negotiate the price with the dealer.

Can I get no deposit car finance with bad credit?

  • It's possible - many lenders specialise in helping customers with less-than-perfect credit histories, including those who need a no-deposit option, though this can be dependent on your credit limit. If you’re upfront about your situation and choose a lender that works with a wider range of credit backgrounds, no-deposit finance can still be a realistic and manageable choice.

No deposit car finance on Hire Purchase

No deposit car finance on Hire Purchase

You can find no-deposit options available on both Hire Purchase (HP) and Personal Contract Purchase (PCP) agreements. At First Response Finance, we specialise in HP. Here's how it works when financing a car with no deposit:

  • The loan is secured against the vehicle.
  • There is no deposit to pay. Instead, you borrow the full value of the car from your lender.
  • You then make your fixed monthly payments for the agreed term (with us, that's between 18 and 61 months).
  • You're charged interest on those instalments, so by the end of the agreement, you'll have paid back more than you borrowed.
  • Once you've made all the payments, including the interest, the car is legally yours.

Choosing no deposit doesn't change the type of agreement you have; it only changes the numbers. You get the same car and the same legal protections – you just start your journey without handing over cash on day one.

The pros and cons of car finance with no deposit

Even if you can skip the deposit, it's worth pausing to ask if you should. Like any financial decision, there is a trade-off. It's about balancing your immediate needs with your future budget. Here's a look at the main pros and cons to help you decide.

  • Keep your savings safe: Draining your bank account for a down payment can leave you vulnerable. If you use your emergency fund for a car deposit, you might struggle if you suddenly need new tyres or insurance, or if you have a household repair bill. Keeping your cash accessible gives you a safety net.
  • Get on the road faster: If your car has broken down and you need to work, waiting for months to save a deposit simply not not be an option. No deposit finance removes that waiting period.
  • Higher monthly payments: This is the most immediate impact. As you're not contributing to the cost at the front door, the amount left the repay is higher. That means your regular repayment will be higher than it would have been if you'd paid a deposit.
  • Higher total cost of credit: Interest is charged on the amount you borrow. Since you are borrowing the full value of the car, interest is paid on a larger sum. This means you'll typically pay back more than someone who paid a deposit.
  • There are many circumstances where paying a deposit is unavoidable: if you have any questions, get in touch with our team who'll be able to help.

No deposit car finance vs making a down payment: The difference at a glance

To show you how this works in practice, let's say you're financing a car that costs £10,000. Below, you can see how the numbers stack up with a deposit vs without, based on an average credit rating and a four-year agreement, with an APR of 23.9% Representative.

 

Car finance with a 10% deposit

Car finance with no deposit

Upfront cost

£1,000

£0

Amount borrowed

£9,000

£10,000

Monthly payment

£282

£313

Total interest paid

£4,523

£5,025

Total amount payable

£13,523

£15,025

In this example, which is purely representative, you're £1,000 better off at the start of the agreement, but end up repaying £1,502 more by the end of it.

 

Can you get car finance with no deposit if you have bad credit?

Can you get car finance with no deposit if you have bad credit?

This is one of the most common questions we hear. If you have had finance applications declined in the past or know your credit file isn't perfect, you might assume that no deposit car finance is strictly for people with perfect credit scores. But that isn't always the case.

While it is true that some high-street banks or lenders have strict criteria, specialist lenders like First Response Finance work differently. Here's Jonathan, Head of Sales and Marketing to explain further:

"We understand that a credit score doesn't tell your whole story. It doesn't show that you've started a new job, that you've got your budget under control, or that you need a car to get to work so you can keep earning.

"Instead of relying solely on a computer algorithm, we have the ability to use manual underwriting. This means a real person reviews your application. We look at your affordability to see if the monthly payments are realistic for you.

"If you can comfortably afford the repayments without a deposit, having bad credit (such as missed payments in the past) doesn't automatically rule you out."

Find out more about bad credit car finance
Soft and hard credit searches for no deposit car finance

Soft and hard credit searches for no deposit car finance

If you're nervous about applying because you don't want to damage your credit score further, don't worry. Most lenders will use a soft search to check your eligibility. This lets them see if they can help you without leaving a mark on your credit file that other lenders can see.

At First Response Finance, a hard search is only done if you decide to continue with your finance agreement. It will show up on your file, but paying off your loan in full and on time means you'll actually be taking steps towards improving your credit score.

Key takeaway: Don't rule yourself out before you've checked. If your income is stable and you have room in your budget, a no deposit car finance deal could still be on the table.

How to budget for buying a car on finance with no deposit

How to budget for buying a car on finance with no deposit

Since you're not putting down a deposit, your monthly repayments will be higher. This makes it vital to do a quick health check on your finances before you apply. Here's a simple way to work out your true budget...

1. Calculate your disposable income

Write down your total monthly income (after tax). Then, subtract all your essential non-negotiables:

- Rent or mortgage
- Council tax and utilities (gas, electricity, water, internet, phone)
- Food, household essentials. childcare etc.
- Existing debts (credit cards, loans)

The number you have left is your disposable income. This is the pot of money available for your car finance and running costs.

2. Don't forget the additional costs

Remember, the finance payment is only part of the story. You also need to keep money back for:

Insurance: This can be a significant cost, especially depending on the car group
Fuel: Estimate your weekly mileage
Road tax: Check the tax band of the car you're looking at
Maintenance: Tyres, servicing and MOTs

Once you've factored these things in, you should be well on your way to understanding where you stand. 

3. Use a calculator

Once you know how much wiggle room you have, use a car finance calculator to play with the numbers.

- Set the loan amount to the full value of the vehicle
- Select your credit rating
- See how the estimated monthly cost changes over different repayment term.

Pro tip: Always leave yourself a buffer. We never recommend stretching your budget to the absolute limit. If your calculations show it's going to be tight, it might be worth waiting to save even a small deposit or looking for a slightly cheaper vehicle.

How to apply for no deposit car finance

Many people think they need to find a car before they can apply for finance - while this may help you get an idea of what you're looking for, you can also make sure you have your finance sorted first.

Doing this means you know exactly how much you have to spend. It  gives you the confidence to pick the right car without the stress of wondering if you'll be accepted.

Here is the simple three-step process to getting car finance with no deposit:

  • Start by filling out our online quote form. With most lenders like us, this only takes a few minutes.
  • We use a soft search at this stage. It tells us if you are eligible without leaving a footprint on your credit file.
  • In most cases, you will know if you are approved almost immediately.
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Our car finance application criteria

Whether you're looking to buy your first car or a seven-seater for your growing family, we can provide finance on a variety of brands such as Ford, Vauxhall, and Nissan. For more information, check out our fixed and flexible car finance criteria:

Fixed Criteria

  • Aged 18+
  • UK resident
  • Petrol maximum mileage: 120,000
  • Diesel maximum mileage: 160,000

Flexible Criteria

  • 18 - 61 month terms
  • No deposit required
  • £2,000 - £15,000 lend
  • Provisional driving licences considered

While our criteria helps us to lend responsibly, we're flexible on things such as the age of the car and the term of the agreement. For example, you can choose to pay your car finance loan over a long period, i.e. 48 months, or make larger instalments and pay your finance agreement off in as little as 18 months.

Explore your payment options

Hire Purchase pros and cons

Unsure if a Hire Purchase agreement would be suitable for you? Check out some of the benefits and potential drawbacks.

  • Fixed interest rate
  • Simple to arrange
  • No deposit required
  • Flexible terms (18 - 61 months)
  • No annual mileage restrictions
  • Fixed monthly (or weekly) repayments
  • You own the car once the final payment is made
  • Customers are protected under the Consumer Rights Act (2015)
  • Finance is subject to status
  • You don't own the car until the final payment is made
  • Due to interest, you'll pay back more than you borrowed
  • The car's at risk of repossession if you don't keep up with repayments
  • Not suitable if you plan on paying off your finance agreement within six months

FAQs about no deposit car finance

We can help you decide if no deposit car finance is right for you

We can help you decide if no deposit car finance is right for you

Buying a car on finance with no deposit offers a realistic route to keeping your savings intact and getting on the road quickly.

However, it does mean a higher monthly commitment. The best advice we can give is to be honest with your budget. If the monthly payments fit comfortably within your disposable income, then no deposit car finance can be a safe and convenient way to buy your next vehicle.

At First Response Finance, we believe in helping you make the decision that is right for your financial situation. Check out more of our detailed guides on car finance and bad credit, and feel free to get in touch if you have any questions.

Ready to see what you can afford? You don't need to guess. You can find out if you're eligible for no deposit car finance in minutes, without affecting your credit score.

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This page was last reviewed in December 2025.

First Response Finance is a responsible vehicle finance lender, and all decisions are made in the best interests of the customer; based on credit scores, status, and income at the time of application. We'll never approve an application if we believe you might struggle with repayments.

Get independent advice on money, finance products, debt management, and budgeting through Citizens Advice and MoneyHelper.