The complete guide to no deposit car leasing: Everything you need to know

What you need to know about no deposit car leasing: the good, the bad, and whether it’s for you

Getting behind the wheel of a brand-new car shouldn’t mean emptying your bank account in one go.

That’s where no deposit car leasing comes in – a flexible way to drive the car you want, without the large upfront payment you don’t want.

Whether you’re looking to preserve your cash flow, don’t have thousands sitting in your bank account or savings, or just want to spread your costs evenly, no deposit leasing could be the perfect solution for your next car.

What is no deposit car leasing?

No deposit car leasing lets you lease a brand-new car without needing a large upfront cost.

No catch, no tricks – it really is as simple as that.

In a regular lease deal, your first payment (referred to as the initial rental) usually equals three, six, nine, or even 12 months’ worth of payments, depending on what you choose. It’s what makes a car lease deal so flexible.

But with no deposit car leasing, you only pay one month’s rental upfront.

Whether it’s referred to as zero deposit leasing, zero initial rental, or no deposit, it all comes out the same in the wash – leasing a car without paying a hefty sum in your first month.

You’re essentially swapping a large initial payment for slightly higher monthly payments, but the total cost over the lease term is roughly the same.

How does no deposit car leasing work?

No deposit car leasing works much like a traditional car lease, just with a different payment structure.

You’ll start with choosing your contract length (usually between two and four years, though longer lease terms are available) and deciding on your annual mileage (between 5,000 and 30,000 miles).

But here’s where things differ with no deposit leasing.

Instead of paying an initial rental equivalent to three- or six-monthly payments, you pay just one month’s rental upfront. 

This keeps your monthly payments consistent right from day one. No nasty surprises or budget juggling required.

The difference between initial rental and deposit

In leasing terms, ‘initial rental’ and ‘deposit’ essentially refer to the same thing: both are upfront costs at the start of your car lease.

When you sign up for a traditional lease, you’ll need to make an initial rental payment, typically equivalent to three, six, or nine months’ worth of payments. This helps lower your monthly cost, but can involve forking out a hefty chunk of cash.

With car leasing, this initial rental is non-refundable and forms part of the hire agreement – it’s not a deposit in the traditional sense, because you won’t get it back at the end of your lease.

No deposit leasing vs traditional leasing

Let’s break down the key differences between no deposit leasing and ‘regular’ leasing:

Traditional leasing

• Initial payment: Three – nine months’ worth of payments upfront
• Monthly payments: Lower due to larger initial payment
• Cash flow impact: Large upfront cost
• Total cost: Roughly the same as no deposit over the lease term, but can be slightly cheaper

No deposit leasing

• Initial payment: Just one month’s rental
• Monthly payments: Higher than with a larger deposit
• Cash flow impact: Minimal upfront cost
• Total cost: Roughly the same as traditional leasing over the lease term

Real-world example

We’ll look at a Peugeot E-5008 lease deal (based on current, live pricing) to give you an idea of the rough difference:

Traditional lease (24 months)

• Initial rental: £2,675 (nine months)
• Monthly payments: £297 x 23
• Total cost: £9,812

No deposit lease (24 months)

• Initial rental: £403 (one month)
• Monthly payment: £403 x 23
• Total cost: £9,992

The difference? Just £180 over two years for the convenience of keeping your cash in your pocket.

*Pricing correct at time of publication – your exact costs will vary depending on the car and terms you choose

Who benefits most from no deposit deals?

No deposit car leasing isn’t for everyone, but it’s perfect if you:

• Don’t have large savings available – not everyone has thousands sitting in their bank account for a car lease
• Prefer to preserve cash flow – whether for business or personal reasons, keeping money available for other priorities (like a holiday, or a really good meal out)
• Want consistent budgeting – the same payment amount from the off makes financial planning easier
• Are looking at higher-spec vehicles – if a three- or six-month deposit (or more) on a performance car would stretch your budget too far
• Run a business – better cash flow management and more predictable monthly expenses

The benefits of no deposit car leasing

Financial flexibility

Your first payment is just one month’s rental, making it easy to budget right from the start.

You’re not losing a large amount of cash in one go, meaning you’ll have more available for other important things, whether that’s home improvements, holidays, or your emergency fund for peace of mind.

Access to better cars

Without needing to find thousands upfront, you might be able to afford a higher-spec model, or premium brand, that would otherwise be out of reach.

Wide selection

All the same cars available on traditional leases are available with no deposit options – you’re not limited to a smaller selection.

Everything’s included

Just like traditional leasing, your no deposit lease deal includes manufacturer warranty and road tax. No hidden extras or surprise costs.

You can even opt for a maintenance package, and keep your automotive costs across the board more consistent.

The downsides of no deposit leasing

While no deposit leasing offers great flexibility, there are a few things to keep in mind:

Higher monthly payments

Your monthly payments will likely be higher than they would with a traditional initial rental, where you’re paying off a chunk of the lease upfront.

You’re essentially spreading that initial cost across your monthly payments instead.

Credit requirements

You’ll need a good credit score to qualify for no deposit leasing.

Since you’re not putting money down upfront, lenders want extra reassurance that you’re reliable.

You won’t own the vehicle

Just like with traditional leasing, you’ll return the car at the end of your contract.

If ownership is something that’s important to you, leasing in any guise – deposit or no deposit – might not be right for you.

Can anyone lease a car with no deposit?

No deposit leasing is becoming increasingly popular as more people want flexible finance solutions. Not everyone has the ability to put down a hefty deposit for their car lease, so opting for a no deposit lease is a good alternative.

To lease a car without a deposit, you’ll need:

• A good credit score – this is crucial because you’re not putting money down upfront
• Proof of income – to show you can afford the monthly payments
• UK residency – for at least three years for most lease agreements

If you have a poor credit score, it’ll generally be much tougher to find a no deposit deal.

It’s not completely impossible, but your choice will be much more limited in terms of the funders you’ll have available, which could in turn change the monthly payments you’ll be making.

What’s the catch with no deposit leasing?

There’s no catch – but like all car leasing deals, you have to pass a credit check to be accepted for a no deposit lease.

This check ensures you’re trustworthy enough to make the payments over the lease term.

The credit check might be stricter than for a standard lease with a bigger deposit, because you’re essentially ‘borrowing’ more money since you’re not paying an initial rental. But if your credit score is good, this shouldn’t be a problem.

No deposit business car leasing

Plenty of no deposit deals are available for business car leases as well.

There’s no big difference with these, except it’ll be your company’s credit that gets checked rather than your personal credit rating.

Business benefits of no deposit leasing include:

• Improved cash flow – keep working capital available for business operations
• Easier budgeting – consistent monthly payments help with financial planning
• Tax advantages – lease payments can often be offset against tax

As long as your company accounts and credit rating are in good order, you should be good to go.

How to find the best no deposit deals

Finding the right no deposit lease deal doesn’t have to be complicated. Instead, follow our easy steps, and you’ll be well on your way to no deposit leasing success:

1. Know your budget

Work out what you can comfortably afford each month, remembering that no deposit deals typically have higher monthly payments.

You can search our website by budget, so you can narrow down your options to what’s in your price bracket to make life easier.

2. Consider your needs

Think about:

• Annual mileage requirements
• Fuel type preferences (petrol, diesel, hybrid, electric)
• Size and style of vehicle
• Contract length

3. Compare total costs

Don’t just look at the monthly payments – compare the total cost over the lease term to make sure you’re getting good value for your money.

4. Use a trusted broker

Working with a reputable leasing broker – that’s us! – gives you access to exclusive deals and expert advice to find the perfect match for your needs.

Don’t just take our word for it though.

Our Feefo reviews will give you an idea of what it’s like to work with us to find your perfect lease deal.

Electric cars and no deposit leasing

Electric vehicles are particularly well-suited to no deposit leasing.

The higher list prices of many EVs can increase the cost of the traditional deposit, so spreading this cost across your monthly payments makes electric driving more accessible.

Plus, with lower running costs and potential tax benefits for electric business leases, the slightly higher monthly payments of a no deposit electric lease can be offset by savings at the charging point.

Making your decision

No deposit leasing could be perfect if you need a car, but don’t have the savings for an upfront payment.

You’ll avoid a large initial payment, instead paying in manageable monthly instalments.

The key is being honest about your financial situation and preferences. If you value cash flow flexibility and don’t mind slightly higher monthly payments, no deposit leasing puts you in the driving seat of your next car without the financial stress.

Remember, whether you choose a traditional car lease deal or a no deposit car lease deal, the total cost over the lease term is roughly the same, give or take £100 or so.

It just depends on whether you prefer to pay more upfront and have lower monthly payments, or pay less upfront with higher monthly payments.

FAQs

Is no deposit car leasing more expensive?

The total cost over the lease term is roughly the same as traditional leasing – you’re just spreading the initial payment across your monthly costs instead of paying it upfront.

What credit score do I need for no deposit leasing?

You’ll need a good credit score – typically 700+ - though this can vary between lenders, and your credit score will look slightly different depending on where you’re looking.

The exact requirements depend on the funder, and the value of the car you’re leasing.

Can I get no deposit leasing with bad credit?

It’s more difficult, but not impossible.

Your options will be more limited, and you might need a guarantor. Your best bet is to speak to our leasing experts, who will be able to talk you through your options.

Are electric cars available on no deposit leases?

Yes – all the same vehicles available on traditional leases are available with no deposit options, including electric cars.

Can I end a no deposit lease early?

Yes, but there are usually early termination fees. The terms vary between agreements, so check your contract carefully.