What is a deposit contribution?
A deposit contribution is a sum of money you can get from a dealership or manufacturer for use towards your car deposit when applying for finance
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A deposit contribution refers to an amount of money that’s put towards your deposit when you’re getting a car on finance.
This works out as a nice bit of discount on your new car, with different retailers offering different contributions.
The larger your deposit, the lower your monthly payments will be – ideal for taking the edge off your next car finance deal.
‘Deposit contribution’ explained
The way your deposit contribution works will depend on how much you’re being given.
If you were planning on putting down a £2,000 deposit but are offered a £1,000 deposit contribution, then you’ll have a chunky £3,000 deposit overall.
That’s a pretty hefty bit taken off your monthly repayments.
Advantages of deposit contribution
Getting a deposit contribution will mean that you’ll have a larger deposit on your new finance car.
Putting a larger deposit on your car finance deal will mean your monthly payments will be calculated at a lower cost, so you’ll have lower monthly bills.
If you’re struggling to put together a larger deposit, a deposit contribution can help you get on the road in your new car much quicker.
Deposit contributions are available for both Personal Contract Purchase (PCP) and Hire Purchase (HP) car finance, so you can choose the option that works best for you and still enjoy the discount.
What is a deposit?
In car finance, a deposit is a sum of money you will put down at the start of your contract to secure the loan.
Putting down a larger deposit is a good way to reduce your monthly repayments, and a deposit contribution makes this easier to do.
Can you get your car deposit back?
In most cases, if the seller has made you an offer, you’ve accepted it and then paid a deposit, you’ve formed a legally binding contract and won’t be able to get your deposit back.
There are some scenarios, however, where you may be able to get a refund.
When can I get my car finance deposit refunded?
If the car you placed the deposit on is no longer available
If the seller has breached the contract
If your car finance application gets rejected, the deposit will be returned to you.
You should also be aware that while a finance agreement has a 14-day cooling-off period, this might not cancel the entire deal as you have essentially signed two agreements – one with the seller and one with the finance company – so make sure you check this before cancelling any finance.
As ever, it’s best to check the terms and conditions before you sign to make sure you’re happy, and double-check with the lender.