When you’re ready to buy a new set of wheels, whether it’s brand-new Kia Sportage or a used Tesla Model 3, one of the first questions you’ll likely have is ‘how much is a deposit for a car’.

In the UK, the amount you’ll need for a car deposit can vary enormously and depends on several factors, including the type of finance agreement you choose, the price of the car, and your credit history. To make things a little clearer, let’s break down these factors to help you budget for your new ride.

Understanding car deposits

A car deposit is an initial payment made at the time of the vehicle purchase. It’s a portion of the total cost that you pay upfront and reduces the amount you’ll need to borrow through finance plans like a personal contract purchase (PCP) or hire purchase (HP). The deposit not only reduces your monthly payments but can help secure a better interest rate and terms on your agreement.

Factors influencing the size of your deposit

Now you know more about what a car deposit is, let’s take a closer look at the factors that can affect how much you’ll need to pay.

Type of finance agreement

Different finance plans require different deposit amounts.

PCP: How much is a deposit for a car with PCP? Personal contract purchase plans usually ask for anywhere between 10% and 30% of the car’s value as a deposit. The flexibility of PCP plans often means you can adjust the deposit to find a monthly payment that suits your budget.

HP: Hire purchase agreements usually require a deposit of around 10% of the vehicle’s price, though this can be higher depending on the agreement with the lender.

Personal loans: If you’re taking out a personal loan from a bank or other financial institution, the deposit might be flexible. Some lenders offer loans for the full value of the car, which could potentially reduce the deposit to zero.

Cost of the car

The answer to ‘how much is a deposit for a car’ also depends on the purchase price. Naturally, the more expensive the car, the higher the deposit. For example, a £30,000 car, at a 10% deposit rate, would mean a £3,000 upfront payment.

Your credit rating

Your credit score plays a key role in determining how much is a deposit for a car. A high credit rating establishes you as a responsible borrower and can convince lenders to reduce the deposit amount. On the flip side, a less-than-perfect credit score may prompt lenders to request a bigger deposit.

Average deposit amounts

While there’s no one-size-fits-all answer, most British motorists can expect to pay a deposit of anywhere from 10% to 30% of the total cost of the car. Here are a few scenarios:

Economy cars: For more affordable vehicles priced around £10,000, you might be looking at deposits from £1,000 to £3,000.

Mid-range cars: How much is a deposit for a car for vehicles in the mid-range market? For cars priced around £20,000, expect to pay a deposit of between £2,000 and £6,000.

High-end cars: For luxury cars or higher-spec models, which can cost upwards of £40,000, the deposit might be anywhere from £4,000 to £12,000 or more, depending on your finance deal.

Consider no deposit car finance

Most auto finance agreements start with a cash deposit however this isn’t a hard and fast rule. For some motorists, no deposit car finance can be a great way to skip the deposit and secure the keys to a new car, without parting with a large sum of cash. Whether you’re finding it hard to save for a deposit or simply want to preserve your capital for other expenses, no deposit car finance is an attractive option for many Brits. 

Get behind the wheel with My Car Credit

Whether you’re looking to go down the traditional auto finance route and kickstart your agreement with a deposit, or you’d prefer to fast-track the process with a no deposit plan, we’re here to help. At My Car Credit, we’re dedicated to securing you the right deal on car finance, no matter what your budget or financial situation.

Give our online car finance calculator a try and get on the road to your dream car today!

Rates from 9.9% APR. Representative APR 12.4%

Evolution Funding Ltd T/A My Car Credit

My Credit Rating

Excellent

  • You are a home owner
  • You have been on the electoral role for a long period of time
  • You have current credit arrangements and mortgage with no defaults
  • You have no CCJs, credit arrears or missed payments
  • You rarely apply for credit
  • You are employed or self-employed

Good

  • You are on the electoral role
  • You are a home owner or long standing tenant
  • You have a stable employment history
  • You have current credit arrangements with occasional missed payments
  • You have no CCJs

Fair

  • You are or have recently been on the electoral role
  • You may have recently changed address
  • You may have occasional missed payments
  • You may have an old CCJ
  • You may have regularly applied for credit

Poor

  • You may have had frequent changes in address
  • You may not be traceable on the voters roll
  • You may have exceeded credit card limits
  • You may have missed payments on current agreements
  • You may have had a CCJ in the past

Bad

  • You may not be traceable on the voters roll
  • Your credit cards are over their limits
  • You have recent CCJs
  • You may have been refused credit elsewhere
  • You may be in a debt management plan
£

X monthly repayments of
£X

Typical rate

Loan amount

Total payable

X% APR*

£X

£X

*for illustration purposes only

No impact on your credit score*

Representative Example

Borrowing £7,500 at a representative APR of 12.4%, annual interest rate (fixed) 12.36%, 47 monthly payments of £196.44 followed by 1 payment of £206.44 (incl. estimated £10 option to purchase fee), a deposit of £0.00, total cost of credit is £1,939.12, total amount payable is £9,439.12.

Evolution Funding Limited, trading as My Car Credit, is a credit broker and not a lender.

Please ensure you can afford the repayments for the duration of the loan before entering into a credit agreement.

*Initial application is a soft search. Should you progress, some lenders may perform a hard search on your credit file.

Require more help?

Got a question you can’t find the answer to, or need some advice and guidance around taking out car finance? Our Car Credit Specialists are friendly, experienced, and here to help so get in touch today!