No Deposit vs Low Deposit Car Loans in NZ (2025 Comparison)
Choosing between no deposit car finance and a low deposit car loan is one of the first decisions many Kiwi buyers face. Both can get you into your next vehicle quickly, but the costs and approval chances differ. This guide explains the key differences, pros and cons, and which option might be right for you.
What is No Deposit Car Finance?
No deposit car finance allows you to drive away without paying anything upfront. The entire cost of the vehicle is covered by the loan, and you repay it through instalments over the agreed term. It is the fastest way to get on the road with $0 deposit.
What is a Low Deposit Car Loan?
A low deposit car loan requires a small upfront payment, usually between $500 and $2,000. This reduces the total amount borrowed and can sometimes improve your approval chances and interest rates.
Comparison: No Deposit vs Low Deposit Car Finance
| Factor | No Deposit Finance | Low Deposit Loan |
|---|---|---|
| Upfront Cost | $0 upfront | Small upfront payment ($500–$2,000) |
| Approval Chances | Depends strongly on income and credit | Often easier to approve with some deposit |
| Interest Rates | May be slightly higher | Can be lower due to reduced risk |
| Weekly Repayments | Higher, as you are financing 100% | Lower, as you finance less |
| Ownership | Full ownership once repayments are complete | Full ownership once repayments are complete |
Pros and Cons of Each Option
No Deposit Finance
- No upfront payment required
- Get on the road immediately
- Ideal if savings are limited
- Higher repayments overall
Low Deposit Loan
- Lower repayments
- Can improve approval chances
- Potentially lower interest rates
- Requires some cash upfront
Which is Better for You?
The right choice depends on your financial situation. If you need a car now and have no savings, no deposit finance makes sense. If you can manage a small upfront payment and want lower repayments, a low deposit loan may save you money long term.
Apply Online Today
At Dave Allen Motors, we offer both no deposit and low deposit car finance options. Apply online today, and our team will help find the right solution for your budget and lifestyle.
❓ Frequently Asked Questions
Is no deposit car finance harder to get than low deposit?
No, both are common in NZ, but lenders may look more closely at income and credit for no deposit applications.
Do I pay more interest with no deposit?
Yes, since you borrow the full amount, repayments are higher and total interest may be more than with a low deposit loan.
Can I trade in my current car as a deposit?
Yes, trade-ins are accepted as part or all of your deposit, reducing the loan amount needed.
Do both options give me ownership at the end?
Yes, once all repayments are made, you own the vehicle in both no deposit and low deposit agreements.