Stepping into university life is exciting and overwhelming at the same time. One travels from the room to the university and vice-versa every day. If your university is not nearby, you may depend on transport services. However, travelling to and fro consumes the most money.
It is the reason a student thinks about owning a car. Apart from attending college on time, it is cheaper than public transport and grants the peace of education.
Students explore car finance quotes to get the right one for their needs. At the same time, they share a few inhibitions:
- Can I qualify for car finance at low income?
- Will I need a guarantor if I am unemployed?
- How should I arrange a deposit?
- Can I qualify for 0 0-deposit car finance?
And many more…
Whatever your hesitations, car finance is the most important decision of anyone’s life. Moreover, a deposit forms an integral part of the agreement. If applying as a student, analyse the situation from every aspect possible. You may find it hard to save for a deposit with no or limited income source.
So, what can you do to own the car without a deposit?
5 Ways to get a no-deposit car finance as a student
Students sharing the dream of owning a car without much savings may finally be able to achieve that. However, they must ensure strong finances and ideal spending to keep the chances high. Here are other ways you can get no-deposit car finance:
1) Pick the best PCP car finance quotes
This type of student car finance does not require a deposit. Instead, one must repay the loan amount in easy monthly instalments after loan approval. Students with regular income can choose a flexible repayment structure and make payments accordingly.
Under this, you can only drive the car up to a specific mileage limit. After completing the loan tenure, you can either own the car, return it to the provider or use the equity in the car as a deposit over the next agreement. However, a fee one pays by the end of the agreement may break the budget. It is the reason behind the low monthly payments on the car finance agreement.
2) Check possibilities of “Hire Purchase”
If you want a better option, Hire Purchase can help. It is for individuals with low income and deposits. However, one may benefit from this only for used car finance. The reason is -one can qualify for used car finance over a new one without a deposit. A car’s depreciation value impacts the overall price. It makes it more affordable for the person with low finances.
Moreover, students are first-time drivers who prefer to reduce the risk. With a used car finance agreement on Hire Purchase, explore the roads easily. It is ideal for the one who wants to own the car after the agreement. You can split the cost of the deposit and monthly payments and pay a small fee to own the car by the term’s end.
3) Apply for “0% car finance”
0% car finance is an advertisement offer that most dealers and lenders provide to first-time customers. Under this, you do not need to pay any interest. However, one must meet the basic requirements to get the 0% deposit car finance. It is available only on Hire Purchase and Personal Contract Purchase (PCP). Zero-interest car finance deals are temporary and only available for a few days.
To qualify, you need a strong credit score and finances. This is because interest-free loans are expensive for the provider. Thus, they only approve if you can qualify for the minimal requirements.
It is the best way to finance a car for the one with low deposit money. If you want to benefit from this but need cash flexibility, a £10000-pound loan can help. It will help if you are short £10000 on the deposit. However, be watchful about contractual clauses and additional fees. It may raise the car finance costs substantially.
4) Provide a payment guarantee
It is one of the most important parts of a car finance agreement. Lenders require authentic and sufficient affordability proof. You must figure out the possibilities of guaranteeing the payments. It is critical if you lack the required credit score, income and deposit money.
A guarantor can help you qualify and guarantee the payments for a lower rate car finance with credentials. In case of low credit or finances, loan providers mandate a guarantor. He helps you qualify for the loan and pay on your behalf until you get financial stability.
For all of this, sharing a close bond with the guarantor is necessary. He is someone whom you can trust with finances. Otherwise, the agreement could end up in a mess. Thus, go for it only if you are sure of relying on him for payments.
If neither of you pays, the lender may issue courtly orders. It may impact the credit ratings of both the borrower and the guarantor.
It is a good practice to explain the possibilities and consequences of the car finance agreement before approving the agreement. It will help the guarantor analyse his take and decide whether he should help or not.
5) Go for a personal loan instead of car finance
With personal loans, you do not pay a deposit normally. It is a simple loan agreement that one agrees to pay instalments on. You can own the car if you pay the complete loan amount by the term’s end. Analyse the APR, interest rates, and other costs before a car loan. Moreover, it is a secured loan where the car acts as a security on the loan.
If you pay the loan on time, you can own the car as your legal property. Alternatively, the lender may seize and claim it as theirs. You do not get the money you invested as repayments back.
So, you do not need to worry about deposits here. Instead, ensure timely loan payments to get the dream car.
Deposit reduces one’s liability towards the car finance payments. Moreover, it makes loans affordable with low monthly payments and interest rates. With a high deposit, you get the lowest interest rates and terms. However, students struggle to qualify for car finance as they lack money for a deposit. The above-listed ways may help you get one without deposit money.