Car finance: what is a deposit contribution?

  • What do I need to know about deposit contributions?
  • How do I make the most of deposit contributions?
  • Parkers explains car finance terms
  • What do I need to know about deposit contributions?
  • How do I make the most of deposit contributions?
  • Parkers explains car finance terms

Deposit contributions act like a discount on finance schemes, cutting the amount you pay.

What do I need to know about deposit contributions?

Deposit contributions can be found on PCP and Hire Purchase finance schemes, and may be offered by a manufacturer or a dealer.

The greater the deposit contribution, the less you’ll pay for your car. A large contribution is effectively a discount that reduces your monthly bills.

Deposit contributions can amount to more than £20,000 on some cars and can mean the difference between paying a premium to finance your car and paying much less than the list price – where the discount outweighs any interest charged.

How do I make the most of deposit contributions?

Deposit contributions help to cut your monthly payments by adding to any upfront deposit you put down. They also cut the amount you pay overall should you choose to buy the car at the end of the finance contract.

As a result, you’ll want to keep an eye out for finance deals with large deposit contributions. Substantial contributions can mean that you’re better off opting for a deal which charges interest alongside a contribution than a zero-percent finance deal without one.

Some brands even offer large deposit contributions alongside interest-free credit, making you better off by choosing the finance deal than paying cash.

Similar to

Finance deposit allowance, manufacturer contribution

Want to find out more about car finance? Take a look at our car finance section or head to the Parkers Car Glossary for more motoring meanings

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