Manufacturer finance contribution

FAQs

• What does deposit contribution mean on a new car?

  Deposit contribution means that a dealer or car manufacturer will contribute an amount of money towards the deposit on a new or used car. It is usually only available on certain types of finance, notably PCP deals.

  The contribution may cover the whole deposit, or just a part of it. Or the deal may require you to put in a certain amount before the contribution is unlocked. For example, you may need to contribute £3000 before the manufacturer contributes £1000.

  But that £4000 means that you’ll be able to reduce your monthly repayments and the interest you’ll pay across the entire agreement.

• Do you have to pay back a deposit contribution?

  You won’t usually have to pay back a deposit contribution because it forms part of the wider finance agreement. One of the very few reasons it may need to be repaid is if the finance is cancelled, although that’s a relatively rare occurrence and could be tricky for the dealer or manufacturer to enforce.

• How does deposit contribution work?

  Deposit contributions are usually time-limited offers and see the manufacturer or dealer putting in an amount of money to be used as a deposit. Anything you put in on top will bump up the total deposit, reducing your monthly payments and the interest paid as a result.

  Remember that you may need to lay down a certain amount of money to become eligible for a deposit contribution, and it may only be available for certain models, engines or trims, and will usually be restricted to particular types of finance – typically PCPs.

• What are the advantages of a deposit contribution?

  The main advantage of a deposit contribution is that it’ll bump up the total deposit, allowing you to reduce your monthly payments. That could mean you’re able to get behind the wheel of a better or more well-equipped car, or simply save some cash.

  Indeed you could look at a deposit contribution being a discount on the car itself.

• What are the disadvantages of a deposit contribution?

  There are a few disadvantages to choosing a deal with a deposit contribution, but how much of an issue this may pose will depend on your personal circumstances. For example, you may have to use a certain type of finance over a certain period of time, which may or may not suit your budget or your needs.

  Some dealers might try to move the figures around. For example, they might offer you £1000 less on your part exchange but ‘give’ it back to you in the form of a deposit contribution. You can use our car valuation service to uncover your car’s real value.

  As always, shop around for the best deal, and ask dealers to run the numbers using different types of finance, with and without the deposit contribution. And make sure you get several valuations for your part exchange, too.

  Finally, you should always make sure you fully understand any finance agreement before you commit to it to ensure it fits your needs.