No deposit and 0% APR are both individual hallmarks of a great new car deal. Combining the two creates a very, very tempting offer.
No deposit and 0% APR deals are very rare as it takes dealers longer to claw their money back. In fact right now, offers are hard to find. Only Mazda is currently in the game. But the likes of Renault, Hyundai and Vauxhall have all offered it in the past, however.
It’s worth noting that these offers are only for people with excellent credit ratings. As you’re not paying a deposit, you’re increasing the money you’re borrowing. And lenders don’t like loaning large sums of money to people with low credit scores as they’re more of a risk.
What does no deposit mean?
No deposit is a pretty easy thing to get your head around. It means there’s nothing to pay up front. One way you might see this expressed is via a deposit contribution. These are sums of money carmakers or dealers (or both, on occasion) stump up towards a car finance agreement.
One example of this is with a BMW 5 Series. BMW regularly offers deposit contributions of around £5,000, bringing the deposit of a 5 Series down to something like £6,000.
It’s usually shown like this:
Your deposit: £6,000
Our deposit contribution: £5,000
Total deposit: £11,000
One way in which a dealer might offer a no deposit deal is by providing a deposit contribution large enough to cover the entire deposit.
What is 0% car finance?
A 0% APR car finance deal allows customers to spread the price of a car over a number of years, divided into set monthly payments, with no additional charges.
It’s basically like taking out a loan but without any interest fees added. Generally 0% APR deals are available on Personal Contract Purchase (PCP) and Hire Purchase (HP) agreements.
No deposit 0% car finance deals 2023: Full list
Mazda no deposit 0% APR car finance deals
Mazda is offering its smallest SUV (and only electric car) with no deposit and 0% APR. The MX-30 majors on style, especially the interior, which is brimming with clever touches and unusual materials such as cork. Mazda is also offering three years free servicing and a half-price home charger.*
Mazda MX-30 no deposit 0% APR deal
0% finance on used cars with no deposit
Throughout this article we refer to new cars. 0% finance with no deposit on used cars is available, but in some instances, it isn’t quite the bargain it seems.
Instead of the seller charging money in the form of interest, they simply increase the total price to cover the money they would have made from APR.
An example: If you bought a car from a dealer for £10,000 on a Hire Purchase style agreement with a 5% APR rate, you would pay in total £10,500 over the course of the agreement (assuming for ease that the agreement is over 12 months). £10,000 for the car, and £500 in interest.
Some of these used car 0% finance schemes allow you to skip the deposit, but the dealer simply adds that £500 worth of interest on to the cash price of the car.
