What does the Car Finance Calculator (PCP/HP/Loan) do?

Compare PCP, Hire Purchase and personal loan monthly payments for buying a car. All calculations are performed in your browser using official UK rates and thresholds.

Does this use current UK interest rates?

You can enter any interest rate to model different scenarios. The Bank of England base rate and FCA guidelines influence typical lending rates available in the UK market.

Should I get professional debt advice?

If you are struggling with debt, free professional advice is available from StepChange (0800 138 1111), Citizens Advice, and the National Debtline (0808 808 4000). This calculator provides estimates only.

Car Finance Calculator (PCP/HP/Loan)

Compare PCP, Hire Purchase and personal loan monthly payments for buying a car.

Last updated: April 2026 · Source: FCA — Car finance

Car Price

Deposit

APR (%)

Term (months)

Balloon / GFV (%)

Monthly Payment

£309.49

Amount Financed

£20,000.00

Total Interest

£4,855.68

Total Cost

£29,855.68

Balloon Payment

£10,000.00

Disclaimer

This calculator is provided for informational purposes only and should not be considered as financial or tax advice. All calculations are performed locally in your browser — no personal data is collected or sent to our servers. Rates and thresholds are sourced from HMRC and GOV.UK and are updated for the current tax year. Always verify results with HMRC or consult a qualified professional before making financial decisions.

How It Works

The three main car finance options in the UK are Personal Contract Purchase (PCP), Hire Purchase (HP) and personal loans. PCP has low monthly payments because you only finance the depreciation, with a large optional final "balloon" payment to own the car. HP spreads the full cost over fixed monthly payments with no balloon, and you own the car at the end.

With PCP, you typically put down a 10% deposit, pay monthly for 3-4 years, then choose to make the final payment, hand the car back or use any equity as a deposit on a new deal. Annual mileage limits (usually 8,000-12,000 miles) apply, with excess mileage charges of 5-15p per mile. HP has no mileage restrictions.

Personal loans from banks can be cheaper than dealer finance in total cost because there are no arrangement fees and you own the car outright from day one. This calculator compares all three options side by side, showing monthly payments, total cost of ownership and the effective APR for each.

Example: £25,000 car, £2,500 deposit, 4-year term

PCP (6.9% APR): £280/month + £9,500 balloon = £22,940 total
HP (6.9% APR): £530/month = £27,940 total (own at end)
Personal loan (5.9% APR): £516/month = £27,268 total (own at start)
PCP is cheapest monthly but most expensive if you buy at end
Loan is cheapest overall total cost

Source: FCA — Car finance

Frequently Asked Questions

What does the Car Finance Calculator (PCP/HP/Loan) do?: Compare PCP, Hire Purchase and personal loan monthly payments for buying a car. All calculations are performed in your browser using official UK rates and thresholds.
Does this use current UK interest rates?: You can enter any interest rate to model different scenarios. The Bank of England base rate and FCA guidelines influence typical lending rates available in the UK market.
Should I get professional debt advice?: If you are struggling with debt, free professional advice is available from StepChange (0800 138 1111), Citizens Advice, and the National Debtline (0808 808 4000). This calculator provides estimates only.