Perhaps you’re without a car at the moment and badly need one, or you’re feeling excited about possibly upgrading from your current vehicle. If purchasing through a loan is your preferred option – or maybe for whatever reason, it’s your only choice at present – have you thought about how you’ll raise the initial deposit if you need one?
Here’s something to smile about, the good news is that no-deposit car finance is becoming increasingly easier to find in the UK. It’s making upgrading to a better and more modern vehicle or getting on the road at last with a first car (a shiny new motor to show off) is now an affordable option for many.
However, whether they need a deposit or not, potential borrowers tend to overlook what paying one means (it’s just one of the costs of buying and owning a car). Not factoring in a possible upfront payment into their overall calculations can lead to disappointment, even if the borrower feels confident about making monthly repayments on the loan thereafter.
About zero-deposit finance (without bias)
Don’t be concerned that securing a car loan with zero-deposit finance may mean the choice of cars available to you is then limited. It rarely works that way. Your no-deposit leasing agreement should allow you to choose the most suitable vehicle to meet your particular needs and preferences. It means that you won’t end up with a car you feel a sense of resentment towards, however much more freedom it brings to your life in the day-in-day-out.
No deposit shouldn’t mean higher repayments
If a broker tries to spin you a yarn about how, because there’s no deposit to pay, the repayments you’ll be expected to make on your chosen vehicle will be “slightly higher”, or there’s only one particular make of car that would be available to you, walk away. Zero-deposit car finance should never mean borrowers need to pay for leasing at an increased rate, or be restricted to a specific car brand (offered by a car finance company with a bias towards a certain manufacturer). The whole point of opting for zero-deposit finance is to keep a lid on costs, not to end up getting fleeced. Shop around, in time you’ll find a perfect zero-deposit car finance deal for you, as well as the perfect vehicle!
Poor credit? Don’t worry
Also, if a car loan company runs a credit rating check on you, and comes back claiming that as you’ve got bad credit you’ll need you to pay a deposit, as well as monthly repayments, don’t fall for that one either. Securing a zero-deposit finance on a vehicle is perfectly possible for people whose credit rating is poor. If having bad credit meant no one could secure a car loan, most leasing companies would struggle to find customers, and probably go out of business.
Before doing the rounds of the car finance brokerage companies, find out how your credit rating score is looking. It’s pretty easy to do online, and it’ll give you a clear picture of where you stand credit-wise when you go into meetings with brokers.
Finally, always remember the golden rule: if you’re offered a leasing deal (despite having bad credit) and the repayments are looking worryingly big, say no. Walk away. You’re sure to find a much more suitable deal for you elsewhere. Like here for instance!