Deposit Contributions Explained: Your Questions Answered

In this article, we explain what a deposit contribution is and what you need to know about them in relation to your car finance product.

What is a deposit contribution?

Deposit contributions are often offered as an incentive to buy a new (or sometimes used) car. The contribution is a sum of money that a dealer (i.e. JCT600) or manufacturer (e.g. Audi) will put towards a car finance agreement, such as a Personal Contract Purchase or Hire Purchase. This contribution reduces the overall cost of the car for the customer.

It is often referred to as a ‘Dealer Deposit Contribution’ or a ‘Manufacturer Deposit Contribution’, to indicate who has contributed the sum. Other terms used may include; Finance Deposit Allowance, Manufacturer Contribution, and Dealer Contribution.

How do deposit contributions work?

A deposit contribution acts as a discount which reduces the overall cost of the car and, in turn, the amount of finance you will have to pay for the car.

For example, on a car with a list price of £20,000 that has a deposit contribution of £1,500, this would effectively mean that you will pay £18,500 for the car (if your car is on a 0% interest deal).

Advantages of a deposit contribution

Deposit contributions are popular for a couple of reasons:

  • You pay less for the car
  • They’re hassle-free; it’s all calculated into your finance agreement for you

Things to consider with deposit contributions

It’s important to be aware that just because a deposit contribution was available on a particular car in the past, there’s no guarantee that it will be in the future – these offers can change from month to month.

It’s also important to check how good the finance deal is overall; look what you’ll pay in interest over the course of the agreement, and compare that against the deposit contribution amount.

We have a number of car finance offers available across each of our brands at JCT600 – browse online today.

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