What Deposit Will I Need To Pay For A PCP Deal?


The first payment you’ll need to make towards a PCP deal is the deposit, which finance providers usually require around 10% of the car’s value. However, if you want to put more money down on the car to make your monthly payments cheaper, you can do.


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How much deposit do I need for PCP?

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As we mentioned earlier, the exact deposit amount will differ depending on the value of the vehicle you’re looking at. But as a general ballpark figure a finance provider will usually require you put down at least 10% of the car’s value.

So, as an example, if you’re interested in a car that’s worth £20,000, a minimum deposit of £2,000 is what you’d be expected to pay. This doesn’t mean you have to stick with this fixed amount. A higher deposit will mean you get lower monthly payments, making the car more affordable.

If you time the purchase of your next car well (e.g. at the end of the sales quarters in March, June, September and December) you may find that if you go through a dealership that you can get deposit contribution. This is a sum of money offered by the dealership towards your new can boost your deposit, meaning you can easily reduce the cost of your monthly payments.


Remember: deposit contribution PCP deals will come with the condition of a minimum total deposit that may mean you still have to put some money towards the deposit. Also, they may not represent best value, so be sure to compare the total finance cost with other deals.


What is the maximum deposit on a PCP?

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Different manufacturer finance providers have slightly different limits on how much deposit you can pay for a vehicle on PCP. As an example, Volkswagen Financial Services sets a limit of 30% of the car’s value as a maximum amount you can put towards the deposit. Honda, on the other hand, have put a maximum deposit limit as 35% on all its cars.

Online brokers will have similar limits to how much you can pay as a deposit for a car on PCP. The reason for this is because they want to maximise profits on the deal finance.

It’s worth checking online with different brokers what the maximum deposit is and going with an amount that you’re comfortable with.


We recommend paying as much as possible for the deposit on a PCP deal. The more you can put down, the cheaper your monthly payments will be, while there’ll be less interest to pay on the finance instalments.


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How to choose the right deposit for PCP


The first thing you should do before settling on a deposit amount for a car on PCP is to look at how much you have saved up. Is it at least 10% of the value of the vehicle(s) you’re interested in? If so, you may want to go with this amount if you need the car urgently.

Before you settle on a 10% deposit, however (or any deposit for that matter), you need to make sure that you can afford to keep making the monthly payments for the car. So, before you go splashing all your savings on the deposit for a car, remember to look at your monthly budget to know what you can afford.


Can I get PCP deals with no deposit?


Yes, you can get PCP deals with no deposit, but you should remember that these offers tend to be reserved for people with good to excellent credit. This is because you’re borrowing more money in these circumstances, so the finance provider will need reassurance that you’ll pay the money back.


Part-exchanging your old car as a PCP deposit

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If you already own a car but need an easy way to get rid of it while getting a new model, many dealers and brokers offer part-exchange services.

Rather than saving up cash to pay as a deposit for your new car, the dealer or broker will offer you a sum of money for your old model that you can then use as a deposit towards your new vehicle.

Be careful if you decide to do a part-exchange though. A dealer or broker may not offer you exactly what your car’s worth, so it’s best to check what its real value is using one of the many free, online valuation tools. If you get offered substantially more, you’ll be better off selling it separately so that you can pocket some extra cash to put towards your next car.


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