A deposit on a car is often a large part of any negotiation but it doesn’t have to be. Sure, the deal may be more expensive in the long run but we work with a range of lenders who are sympathetic to all kinds of situations. That means you could get a no money down deal with poor credit.
But should you?
We would only suggest skipping the down payment if you have no other option. Here’s why.
A deposit on a new car means lower interest
A down payment makes you more attractive to lenders as they stand a higher chance of making their money back should you default. If you put down a deposit against the value of the car, there is a higher chance of the lender recovering the total amount should things go wrong.
This makes you less of a risk, which can result in lower interest rates.
A deposit on a new car means more lenders willing to lend
The lower the risk you are perceived to be, the more lenders there are willing to work with you. Not all lenders work with those with bad credit. Not all lenders who work with bad credit will work with those with no down payment.
Both situations are regarded as higher risk and not all lenders are willing to work with that. We know plenty that do though so don’t let it put you off!
A deposit on a new car means less of a car loan to cover the cost
The more of a down payment you can afford to place, the lower the car loan you will need. This benefits you as it should mean lower monthly payments or a shorter loan term.
Both of which is great news for your financial situation!
A deposit on a new car means a lower total cost for the car loan
A deposit means less money you borrow over the term of the loan. The lower the amount, the lower the amount of interest you pay. While the interest rate might stay the same, paying interest on a lower amount means paying less over the term.
Low or no deposit car loans
We work with a few lenders who will consider applications with no down payment. We would urge you to save for a deposit if at all possible but if your circumstances don’t allow, we can still help.
We work with all kinds of people in all kinds of circumstances. Our only aim is to get you the car you need at a price you can afford. If that involves a no deposit car loan, we will do our best to find you one!