How Much is a Deposit for a Car?

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!