0% deposit finance (PCP)

drbukar

Hello all,

I see a lot of dealers offering 0% deposit finance. It seems to easy to pay no deposit upfront and drive away with a £13k ...Seat Arona

Are there any downsides to paying no deposit? 

Grumpy_chap

What is the interest rate?
The lower the deposit, the more you have borrowed and the more interest you will pay.  Monthly and total cost will be higher, all other things being equal.

silvercar

Could you get a better deal by financing the car yourself? Someone somewhere is paying for the 0% deal, possibly factored into the initial price.

Herzlos

drbukar said:

Hello all,

I see a lot of dealers offering 0% deposit finance. It seems to easy to pay no deposit upfront and drive away with a £13k ...Seat Arona

Are there any downsides to paying no deposit? 

Seat Aronas start at £20k, so I don't know if the £13k is a typo.

Deposits reduce the loan amount and thus more deposit saves you some interest. It's most important to look at the total cost of borrowing (deposit + monthly payments) when looking at deals, and not just the headline figures.

You seem to be asking a lot of questions that are about getting a new car with no upfront payment - are you confident you can afford a new car? There are plenty of used cars available for a fraction of the cost.

MrFrugalFever

Almost all PCP arrangements with every lender will allow 0% deposit and often a maximum 40% deposit. It’s not a ‘special offer’ it’s standard practice. The only time it’s a special offer is it the dealer/lender is offering 0% interest on the entire amount borrowed.