PCP Car Finance Calculator (with HP Option)
Use our free PCP car finance calculator to estimate your monthly payments, or switch to the HP car finance calculator mode to see the cost of owning outright.
How the PCP car finance calculator works
A PCP car finance calculator estimates your monthly payment based on the fact that, with Personal Contract Purchase, you're only paying off the portion of the car's value it's expected to lose over the term — not the full price. The calculator subtracts your deposit and an estimated future value (the "balloon" or GFV) from the price, then spreads what's left over your chosen term with interest.
This is why PCP calculators are so widely searched: the monthly figure isn't obvious from the headline price alone, since it depends heavily on a number most buyers don't know off the top of their head — the car's estimated future value. Enter your figures above in PCP mode to see how a bigger or smaller balloon shifts your monthly payment.
How the HP car finance calculator works
An HP car finance calculator is a simpler calculation than PCP, because Hire Purchase doesn't involve a balloon payment at all — you're paying off the entire vehicle price (minus your deposit) plus interest, spread evenly across the term. At the end, the car is yours outright with nothing further owed.
Switch the toggle above to HP mode to see this calculation directly — you'll notice the monthly payment is higher than the equivalent PCP figure for the same car, deposit, and term, because you're repaying 100% of the car's value rather than just the depreciating portion.
3 worked examples
Example 1 — Hire Purchase
A £22,000 car, £2,000 deposit, 9.9% APR, 36-month term.
£22,000 − £2,000 = £20,000
Monthly payment (amortised over 36 months):~£645/month
Total payable:£2,000 deposit + (£645 × 36) = ~£25,220 — about £3,220 in interest, and full ownership at the end
Example 2 — PCP, same car, same deposit and APR
The same £22,000 car, £2,000 deposit, 9.9% APR, 36-month term, with an estimated £8,800 balloon payment (40% of price).
£22,000 − £2,000 − £8,800 = £11,200 is repaid over the term
Monthly payment:~£361/month — significantly lower than the HP figure in Example 1
Total payable if you pay the balloon at the end:£2,000 deposit + (£361 × 36) + £8,800 balloon = ~£23,796 — a lower total than HP here, but you don't own the car unless you pay that final balloon
Example 3 — PCP with a smaller balloon
Same car and terms, but a smaller estimated balloon of £5,000 instead of £8,800.
£22,000 − £2,000 − £5,000 = £15,000
Monthly payment:~£483/month — higher than Example 2's £361, because you're repaying more of the car's value monthly instead of deferring it to the balloon
Examples 2 and 3 show the core PCP trade-off: a bigger balloon means lower monthly payments now, but a bigger lump sum owed if you want to keep the car at the end.
HP vs PCP: the real difference
| Factor | Hire Purchase (HP) | PCP |
|---|---|---|
| What you're paying off | The full vehicle price | Only the estimated depreciation, not the full price |
| Typical monthly payment | Higher | Lower, for the same price/deposit/term |
| Ownership at the end | Automatic, once all payments are made | Only if you pay the balloon (GFV) |
| Mileage limits | None | Yes — excess mileage charges apply if exceeded |
| Flexibility at the end | None — you own the car | Three options: return, pay balloon to keep, or part-exchange |
| Condition requirements | None beyond normal use | Fair wear and tear standards apply if returning the car |
What "representative APR" actually means
Under FCA rules, when a lender advertises a "representative APR," they only have to offer that rate to at least 51% of customers who are accepted for the finance. That means up to 49% of accepted applicants could be offered a higher rate based on their individual credit profile. The advertised rate is a guide, not a personal guarantee — your actual offer depends on your credit history, income, and the specific lender's assessment.
Your options at the end of a PCP agreement
At the end of a PCP term, you have three choices:
- Hand the car back — provided it meets the fair wear and tear standard and you haven't exceeded the agreed mileage, you walk away with nothing further to pay
- Pay the balloon payment — pay the Guaranteed Minimum Future Value in full (or refinance it) to own the car outright
- Part-exchange — if the car's actual value exceeds the balloon figure, that difference (sometimes called "equity") can go toward a deposit on your next car
What this calculator can't tell you
Your actual approved APR
As covered above, the representative APR isn't guaranteed for every applicant. Your real rate depends on a credit check the lender carries out, which this calculator has no way of predicting.
The exact interest calculation method your lender uses
This calculator uses a simplified, widely-used approximation. Real finance agreements typically use a reducing-balance calculation carried out by the lender's own systems, which can produce a slightly different monthly figure than this estimate.
Whether the estimated balloon is realistic
If you're estimating rather than using a real quote, the balloon figure is a guess. An unrealistic balloon estimate will meaningfully skew the monthly payment shown — use an actual finance quote's GFV figure whenever you have one.
Excess mileage or condition charges (PCP)
PCP agreements set a mileage allowance and condition standard; exceeding either at the end of the agreement triggers additional charges not included in this calculator.
Common mistakes
Comparing PCP and HP by monthly payment alone
PCP's lower monthly payment can look like the cheaper option, but you don't own the car at the end unless you pay the balloon — comparing total cost of ownership, not just the monthly figure, gives a fairer picture.
Assuming the advertised APR is what you'll get
As explained above, the representative APR is only guaranteed to at least 51% of accepted applicants. Get a personalised quote before budgeting around the advertised rate.
Underestimating annual mileage on a PCP
Choosing a low mileage allowance to reduce the monthly payment, then exceeding it, can result in significant excess mileage charges at the end of the agreement — be realistic about your actual annual mileage upfront.
Not budgeting for the balloon payment decision in advance
Reaching the end of a PCP term without a plan for the balloon (pay it, part-exchange, or hand back) can force a rushed decision. Think through your preference well before the term ends.
Before you sign
- Get quotes from more than one lender — dealership finance isn't always the cheapest option; independent finance brokers and your own bank may offer better rates
- Check the total amount payable, not just the monthly figure — a longer term lowers monthly payments but usually increases total interest paid
- Be realistic about your annual mileage if considering PCP, to avoid excess mileage charges
- Ask what happens if you want to end the agreement early — early settlement figures and conditions vary by lender
- Read the fair wear and tear guide if you're likely to hand the car back on PCP, so you know what condition standard applies
🚗 See your full annual running costs too
Finance is only one part of car ownership cost. Add fuel, insurance, tax and servicing for the complete picture.
Use the Running Cost Calculator →How we calculate
Hire Purchase: Amount financed = Price − Deposit. Monthly payment is calculated using a standard amortising loan formula over the term, at a monthly rate derived from the APR entered.
PCP: Amount financed (excluding balloon) = Price − Deposit − Balloon. The monthly payment is calculated by amortising this reduced amount over the term, using the same monthly rate. This is a simplified approximation of how PCP payments are structured — real lenders may calculate interest using a reducing-balance method across the full financed amount including the balloon, which can produce a slightly different figure.
Frequently asked questions
How does a PCP car finance calculator work?
A PCP car finance calculator subtracts your deposit and an estimated future value (the balloon/GFV) from the car's price, then works out your monthly payment by spreading the remaining amount over the term with interest. This is different from a standard loan calculator because you're not paying off the whole car — only the portion it's expected to depreciate by.
What's the difference between a PCP and HP car finance calculator?
A PCP car finance calculator factors in a final balloon payment, resulting in lower monthly payments but no automatic ownership at the end. An HP car finance calculator has no balloon — it spreads the full vehicle price over the term, so monthly payments are higher but you own the car outright once the agreement ends.
What is a balloon payment?
Also called the Guaranteed Minimum Future Value (GFV), it's the estimated value of the car at the end of a PCP agreement. You can pay this amount to own the car, hand the car back instead, or use any excess value as a deposit toward your next car.
Will I definitely get the advertised APR?
Not necessarily. Under FCA rules, a lender's advertised "representative APR" only has to be offered to at least 51% of customers who are accepted for finance. Your actual rate depends on your individual credit assessment.
What happens if I go over my PCP mileage limit?
You'll typically be charged an excess mileage fee per mile over your agreed allowance, payable when you return the car or settle the agreement. Choose a realistic mileage allowance upfront to avoid this.
Can I end a car finance agreement early?
Usually yes, though an early settlement figure applies and terms vary by lender and agreement type. Check your specific finance agreement's early settlement terms before assuming you can exit without cost.
References & data sources
- Financial Conduct Authority (FCA) — Consumer credit and representative APR advertising rules, referenced for the "51% of accepted applicants" disclosure requirement.
- MoneyHelper (Money and Pensions Service) — Official, government-backed guidance on car finance, HP, and PCP agreements.
This calculator provides a simplified illustration, not a finance offer or personalised quote. Actual interest calculations, approved APR, and total cost depend on the specific lender and your individual credit assessment. Always obtain a personalised quote before making a car finance decision.