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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  • louis

    is it legal in Dubai?

  • louis

    one more question:
    if is 20% down payment and instead of discount we offer deposit contribution instead of discount none refundable from the customer we take it from our margin is this allow by the law in Dubai?