Deposit

Definition

A deposit is a lump sum paid upfront, to secure the sale of a product or service.

When you take out car finance, you may be required to pay a deposit depending on the Type of Agreement.

Do I need a deposit for car finance?

Whilst a deposit isn’t always required, it will often help lenders look more favourably towards your application and increase your chances of acceptance.

It’s also an effective way to reduce your monthly costs, as you pay less interest on the amount borrowed.

If you have poor or Bad Credit, lenders are more likely to ask for a deposit, as you are considered a greater risk.

Can I get my deposit back?

You have a 14 day ‘cooling-off period’ starting from the date you sign your contract to cancel your agreement.

During this time, you have the right to withdraw from the agreement, and in most cases, your deposit will be fully refunded.

It’s important to check your terms and conditions carefully before signing, to ensure you understand the conditions of which your deposit will be repaid.

No deposit car finance

If you haven’t got spare cash available for a deposit – don’t worry. At Creditplus, we offer flexible deposit options to suit your requirements, including no deposit car finance.

For individuals with limited savings, no deposit finance can be an attractive option. The disadvantage is, the more you borrow - the more interest you pay.

It’s also worth noting, that no deposit finance options are often only available if you have a strong Credit Rating.

If you have a weaker credit history, you’ll usually be required to pay a deposit.

If you don’t have the cash to spare for a deposit, you always have the option to Part Exchange your old car and use the funds towards a deposit for your next car.