Car leasing with no deposit - how does it work?


No deposit car leasing explained

A no deposit lease is the same as any other car leasing agreement, but with no large upfront payment. Your monthly rentals are likely to be slightly higher as a result, but you don’t have to pay a hefty initial rental.

How do you get no deposit car leasing?

Ideally you’ll need a good to excellent credit rating to get a no deposit car lease - if the score range is between 300 and 850 +, a good score will be from around 700 or above. A leasing company will see you as less risky to lend against the better your credit rating is: it will say you’re more likely to be relied on to make payments in full and on time.

Having a no deposit term on a leasing agreement is becoming more popular as customers want to have more flexibility with their finance options. Monthly rates on these types of lease may be higher, but you’ll pay the same amount each month from the first instalment.

Some UK leasing companies may not call these no-deposit deals, as they will take the first monthly payment as the deposit - but they’re still the same leasing offers. So, with a 24-month contract, the rental profile may say 1 + 23 months, rather than 3 + 23 months.

As with all leasing deals, you may also want to add servicing and maintenance costs to your agreement. This will increase your monthly payments but it does ensure most of your motoring costs are budgeted - so there will be no financial surprises.

What’s the difference between zero deposit, 0 down leasing and no deposit leasing?

Zero deposit, 0 down leasing, no deposit leasing and leasing without raised initial payments are all the same. Some leasing companies use different terms, but they all mean the same thing: you don’t have to pay a large lump sum at the start of a leasing agreement.

Do you need good credit to lease a car?

Whether you’re eligible to have a no deposit personal leasing agreement will depend on your circumstances.

If you have a good credit rating, then you can ask a leasing company to give you a quote for an agreement based on no-deposit terms. Most will offer terms with a three-, six- or nine-month deposit as standard, but they should be able to offer you a customised quote with a no-deposit option if you request it.

Can you lease a car with bad credit?

Unfortunately, you’re less likely to get a car lease agreement without a deposit if you have a bad credit rating. It’s not impossible, but you may have fewer options to choose from because finance companies will see you as a greater risk. You’ll fall into this category if your credit rating is below 670 (if the score range is between 300 and 850).

If you come across a leasing company offering an agreement without doing a credit check, be aware - Financial Conduct Authority (FCA) rules mean credit and affordability checks should be carried out before you sign a deal, so you should only deal with trusted leasing companies. Look out for leasing suppliers who are BVRLA members.

Is business car leasing available with no deposit?

Yes, it is - but, as with personal car leasing, it will depend on your company’s credit rating.

If your company accounts are in good order, with a strong trading history, then you can ask leasing companies for a custom quote on no deposit agreements to see what deals are available for a business car lease.

Businesses with poor or limited credit history may have fewer options to choose from. This can include new businesses as they won’t have any accounts history for finance companies to check. Generally, you will require two years of accounts.

No deposit car lease contract examples

So how do no deposit car lease deals work out for your pocket compared to those with higher initial payments?

Here’s an example of a customer car lease quote for a no-deposit 24-month leasing agreement:

"Zero Raised Deposit" Pricing Structure
1 + 23, 8000 miles per annum (non-maintained).
Initial payment = £182.94
Monthly payments = £182.94

And here is another that includes an upfront payment:

Standard Pricing Structure
3 + 23, 8000 miles per annum (non-maintained).
Initial payment = £779.09
Monthly payments = £129.85

Neither of these leasing quotations include servicing and maintenance costs, which is an option that can be added to your lease.

The lower initial rental payment means you don’t have to save up more money before you start a new leasing agreement. You may have to pay a little more over the length of the lease, but your monthly payment stays the same throughout.

And, as with other leasing deals, you can hand the car back at the end of the agreement and upgrade to a newer model if you wish.

Should I choose a no deposit car leasing deal?

Car leasing agreements with no deposit offer you the freedom to decide what you spend your money on in the short term. Or perhaps you may not have the available cash to make a substantial up-front payment at the start of a new agreement. But you can rest assured that your monthly lease rentals will always be the same amount.

Zero deposit leasing is not for everyone. It should also be noted that the monthly lease rental is likely to be greater each month than a car lease with an upfront payment.

But if you don’t have plenty of spare cash, it’s a really affordable way to start leasing a new car.

HOW TO APPLY

Simply select your favourite car from our car leasing deals page or search our website and then choose '1 month' for initial rental on enquiry. 


 

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