Car Finance Calculator (HP / PCP / Loan)
How it works
Hire Purchase (HP): finances the full car price minus deposit. Equal monthly payments include interest. Once paid off, you own the car.
PCP: a chunk of the car's value (the Guaranteed Future Value or 'balloon') is deferred to the end. You pay interest on the whole financed amount but only repay the difference monthly. At the end you can: pay the balloon to own, hand the car back, or part-exchange any equity into a new PCP.
Personal loan: borrow the car price separately, buy the car outright, repay the lender. You own from day one and can sell at any time.
Worked example
£25,000 car, £3,000 deposit, 36 months at 8.9% APR, 40% GFV (£10,000):
- HP: ~£700/month, total £28,200, you own
- PCP: ~£440/month, total £18,840, then £10,000 balloon to own (or hand back)
- Loan: ~£700/month, total £28,200, you own from day 1
Who should use this
- •Anyone choosing how to fund a new or used car
- •PCP comers re-evaluating at end of term
- •Cash buyers comparing finance vs paying outright
Common mistakes
- ×Treating the PCP monthly as the 'cost of the car' — you don't own it
- ×Going over the agreed mileage on PCP (steep per-mile charge)
- ×Voluntary terminating PCP without checking the 50% rule
- ×Ignoring dealer cashback / contributions which can change the picture
Frequently asked questions
Can I settle car finance early?▾
Yes — request a settlement figure from the lender. HP and PCP let you settle anytime; some include early-settlement reductions.
What is the 50% rule?▾
Voluntary Termination — once you've paid 50% of the total amount payable, you can hand the car back with nothing more to pay (subject to fair wear & tear).
Is PCP a good idea?▾
If you always want a new car every 3 years and stay within mileage, yes. If you want to own, HP or a loan are usually cheaper overall.
Can I refuse the dealer's finance?▾
Yes — finance is regulated and you can take a personal loan or HP elsewhere. Dealers may offer extra discounts if you take their finance.