No Initial Rental (“No Deposit”) Leasing

One of the commonly asked questions (and most searched for queries) in this industry relates to a no initial rental (no deposit) style lease car arrangement. To confirm, in most cases it is perfectly possible (and legitimate) to lease a new car on a no deposit basis. However, before making any firm conclusions, you need to consider a few relevant points which should help you in this process.

Most credit brokers/ contract hire companies will advertise with a higher initial rental, generally a “6-spread” arrangement. For reference, depending upon the financial product you choose, the first amount payable will be known either as the Initial Rental or the Initial Payment. For usership (non-ownership style) products such as contract hire CarLease UK describe this as an Initial Rental. For ownership style products like personal contract purchase (PCP) and finance lease CarLease UK describe this as an Initial Payment.

Please note that in both cases the amounts payable are NOT Refundable Deposits. Any monies paid will form part of the funding arrangements and will not be returned to you at the end of the contract – CarLease UK do try avoid (or clarify) the term “deposit” for completeness.

If you do see a 6-spread initial rental on an advertisement and the monthly-rental is £100 (including or excluding Vat) then this will mean that a customer would have to pay £600 (including or excluding Vat) either on the day of delivery or more commonly 7-10 days afterwards. This is almost always taken by direct debit. Some modern websites will allow you to change the initial rental (deposit) to an amount which is more suitable for your requirements. You will notice that the lower the initial rental, the higher the monthly rental will become. Do not be perturbed by this; you are not getting a “worse” deal. The total amount payable on the agreement is actually the same because contract hire is not an interest-led product. Therefore there is no cost-saving with a higher initial rental. Fundamentally, you are choosing an initial rental which will be suitable for the requirements for you or the business.

Why Do Businesses Choose No Deposit/ No Initial Rental Leasing?

A no initial rental / no deposit leasing option is a big consideration for those drivers using a car allowance from their employer. With the growing company car tax rates and also with contract hire due to become an “on-balance sheet”, many employers are converting their fleet into a car allowance or, for drivers who cannot use “eco” options, employees are opting-out of the scheme. While a car allowance is a great benefit, as an employee is given a flat amount per month a higher-initial arrangement is not always ideal. Many car allowance users will be trying to work towards 24, 36 or 48 flat rentals which include the vehicle and all servicing, maintenance and tyres (funder-maintained). For many businesses, cash-flow is king and undertaking to take vehicles which a high initial rental/deposit is not always a pragmatic option.

Why Do Personal Customers Choose No Deposit/ No Initial Rental Leasing?

For personal customers who are not receiving a car allowance, it is still possible to look at a no-initial rental / no deposit contract hire transaction. To manage everything effectively, identify this to your credit broker/contract hire company at the outset. The issue is that some companies do not offer a no initial rental/deposit approach; in some cases a finance company will only proceed with an initial rental of a “3 spread” or more. This is down to the credit criteria of the finance company. You also need to be aware that by having a no initial rental, you must have positive credit. As contract hire and leasing are credit based products, you must undertake a credit check before you are able to procure a vehicle. With zero deposit, you are effectively asking for more credit from the finance company and so the underwriting criteria will be stricter. This means that this is NOT appropriate for those with poor/bad credit.

For more infomation on car leasing without a deposit or minus and initial payment check out the range of vehicles currently on special offer and be sure to ask a member of the CarLease UK team about this upon making a quote request. You can also learn more about car leasing in our help and advice pages or read real life car reviews in our car blog.

Back to top

Help, Assistance and Car Leasing Advice

Lease with Confidence @CarLease UK!


Browse All Manufacturers

We've got Choice in Abundance. You Pay One Fixed Cost!
Help & Leasing Advice | Lease Deals & Special Offers

Browse the latest Electric Lease Car Deals or Hybrid Lease Car Deals here @CarLease UK

See Our New Website electric car leasing
Lease Car Reviews & News @CarLease UK - Helping Customers with Car Choice...

  • Choose from Every Make & Every Model
  • Personalised Factory Order Vehicles & In-Stock Leasing Deals
  • Optional Maintenance-Inclusive Contracts
  • Free Nationwide Delivery Service Included (Areas Covered)
  • Excellent Customer Service as Standard
  • Read our Trust Pilot Reviews or Read Our Blog
  • Select your Initial Rental/ Deposit from Low to High
  • Choose your Lease Terms from 24, 36 or 48 Months
  • Select your Annual Mileage from Low to High

We have over 50 Years in the Car Leasing & Automotive Industry!
Call - 01942 608 606 or Contact Us for leasing help & advice.
Authorised
& Regulated By
The FCA
BVRLA
Broker Member
Full Data
Protection
GDPR
Compliant
CarLease UK

CarLease UK, Car-E-Lease UK, VanLease UK and School Minibus Leasing UK
are trading names of CarLease (UK) Ltd.

Latest Special Offers - Car-e Alternative Fuel Leasing - Leasing Help & Advice - Contact Us

Browse our Popular Brands or the latest Mercedes Deals | Audi Deals | BMW Deals | VW Deals | Range Rover Deals | Nissan Deals

CarLease (UK) Ltd t/a CarLease UK, Car-E-Lease UK and VanLease UK is Authorised and Regulated by the Financial Conduct Authority – our Firm Reference Number (FRN) is 706617.

CarLease (UK) Ltd t/a, CarLease UK, Car-E-Lease UK and VanLease UK is a credit broker and are not a lender. We work alongside a limited number of finance providers who may make payment to us if you enter into an agreement with them. Failure to maintain rentals may result in the vehicle being withdrawn (this may affect your credit).

All images on this website are for illustrative purposes only and may not reflect the actual vehicle which is delivered to you. All prices shown are subject to change at any time and are subject to credit status and vehicle availability.

FRN 706617 | BVRLA Membership No. 1471 | Data Protection Reg. ZA088399 | VAT No. 200422089 | Registered in England 09312506

Our Registered Office - Kings Business Centre, Warrington Road, Leigh, Greater Manchester, WN7 3XG

Copyright 2019 © CarLease (UK) Ltd. All Rights Reserved

Contact Us - Call 01942 608 606

CarLease (UK) Ltd work alongside the select finance companies:

CarLease (UK) Ltd have a partnership and affiliation with: