No Deposit Car Finance
Finance the full cost of your next car with nothing to pay upfront. Kandoo arranges no deposit car finance through a panel of UK lenders, and we run a soft search first, so checking your eligibility has no effect on your credit score.
With 0 deposit car finance, the wait to save a lump sum before you can drive is gone. You choose the car, we find the lender, and your first payment is your first monthly instalment. Poor credit does not rule you out.
Check your eligibility. Takes a few minutes. No impact on your credit score.
What is no deposit car finance?
A car finance, also known as car credit, agreement is where the lender covers 100% of the car’s price and you repay it in fixed monthly payments over an agreed term. There is no lump sum at the start. Zero deposit car finance works through the same two agreement types as any other car finance: Personal Contract Purchase (PCP) and Hire Purchase (HP).
Kandoo is a credit broker, not a lender. We compare a panel of lenders on your behalf and match you with those most likely to accept your application on terms that suit you. Most of the lenders we work with will consider car finance with 0 deposit. Where a particular car or lender does need a contribution, we tell you straight away so you can decide whether to go ahead or look at something else.
We are authorised and regulated by the FCA and we arrange finance nationwide. Wherever you are searching from, the process is the same: check eligibility, get matched, choose your car, drive away.
How does it work? PCP vs HP with no deposit
Both routes give you a fixed monthly payment over an agreed term. The difference is what you are paying for and what happens at the end.
PCP with no deposit
Lower monthly payments, because you only pay off part of the car’s value across the term. The remainder is set aside as a final balloon payment. At the end you can pay it and keep the car, hand the car back, or trade in and start again.
Without a deposit, the monthly figure is a little higher than the same PCP with money down, and the balloon is larger. The flexibility at the end is unchanged. Mileage limits apply.
HP with no deposit
You pay off the full value of the car over the term, so the monthly payment is higher than PCP for the same car. There is no balloon, and the car is yours after the final payment.
HP is often the more accessible option if your credit is limited or poor, because the car itself is the lender’s security. It is also the simpler agreement: one fixed amount every month until you own the car outright.
If you are weighing the two, our guide to how Hire Purchase and PCP work goes through the numbers.
Can I get no deposit car finance with bad credit?
Yes, in many cases. Most pages about no deposit finance treat bad credit as a footnote. For Kandoo it is the main event. A large share of the customers we help have a CCJ, an IVA, a default, or simply a thin file, and most have been declined somewhere else first.
Here is how it works. We run a soft search when you check your eligibility. It does not affect your credit score and other lenders cannot see it. We use it to match you with lenders on our panel who specialise in poor credit, and who weigh your current income and outgoings more heavily than what happened three years ago. The hard search only happens once you have chosen a lender and decided to proceed.
Bad credit no deposit car finance will usually come with a higher rate than someone with a clean file would be offered, and a lender may ask for more documentation. But poor credit does not rule you out, and having no savings for a deposit does not either.
Our guide to no deposit car finance with bad credit explains what specialist lenders look for. If you have seen “no credit check” advertised elsewhere, our no credit check car finance guide sets out what that phrase actually means.
What do I need to apply for no deposit car finance?
Lenders on our panel will typically ask for the following.
- To be 18 or over
- To be a UK resident, with your address history for the last three years
- A valid UK driving licence
- Proof of income and employment: recent payslips or bank statements, or accounts and tax returns if you are self-employed
- Contact details, including a phone number and email address
All finance is subject to status and affordability. Meeting this list does not guarantee approval, but it is what a lender needs to make a decision, and having the documents to hand speeds everything up. Once your paperwork is in, we can normally process an agreement the same day.
Pros and cons of no deposit car finance
Being clear about the trade-off is worth more to you than a sales pitch. The main advantage is speed. The main cost is interest.
Pros
- You get a car now, rather than after months of saving
- Your savings stay where they are, as a buffer for insurance, repairs, or an emergency
- One fixed monthly payment and no lump sum to find
- Available on both PCP and HP, and to applicants with poor credit, subject to status
Cons
- You borrow more, so you pay more interest over the term
- Monthly payments are higher than for the same car with a deposit
- On PCP, the balloon payment is larger, which can leave you with less equity at the end
- Some lenders offer a better rate to applicants who put something down
If you have a car to part-exchange, its value can act as your deposit even when you have no cash to hand. If there is finance outstanding on it, we can settle that as part of the new agreement.
Frequently Asked Questions
The short answer is no as no FCA-regulated lender can guarantee approval, because every agreement has to pass an affordability check first. What Kandoo can offer is a soft-search eligibility check that shows you how likely you are to be accepted before anything is recorded on your credit file, and a panel of lenders that includes specialists in poor credit.
It depends on your income, your outgoings, and your credit profile rather than a fixed cap. With no deposit you are borrowing the full price of the car, so the monthly payment has to fit comfortably within what you have left after essentials. The eligibility check gives you an indication of the amount and terms lenders are likely to offer.
No. A soft search is visible only to you on your credit report. Other lenders cannot see it and it has no effect on your score. A hard search is recorded on your file and happens only when you make a full application with the lender you have chosen. Our guide on how to improve your credit score may be helpful if you do have any credit score concerns.
Yes. Kandoo is based in Manchester and arranges finance for customers across the UK. You can pick a car from our network of trusted dealers or find one yourself, and the application is handled online and by phone, so the process is the same wherever you live.
Over the full term, yes. A deposit reduces the amount you borrow, which reduces the interest you pay and the monthly payment. Some lenders also offer a lower rate when a deposit is paid. What no deposit finance gives you instead is the car now and your savings intact. Our representative APR page explains how our rate is calculated and what affects the rate you are offered.
Choose a lower-priced car, keep the term as short as you can comfortably afford, and compare HP against PCP for the same vehicle. A longer term lowers the monthly payment but increases the total you repay. The eligibility check lets you see the options side by side before you commit.
Kandoo Car Credit is a credit broker, not a lender. Representative APR 22.6%. Representative example: borrowing £8,000 over 60 months with a fixed representative APR of 22.6%, the monthly repayment would be £206.66 with a total cost of credit of £4,400 and a total amount payable of £12,400. This is an example only. Lender fees may apply. All finance is subject to status and income. Kandoo Car Credit Ltd is authorised and regulated by the Financial Conduct Authority (FRN 936619).