UK Car Finance Calculator

With Hire Purchase (HP) you pay fixed monthly instalments that gradually pay off the full amount financed. After the final payment the balance reaches £0 and you own the car outright. With Personal Contract Purchase (PCP) your monthly payments are lower because part of the cost is deferred to a Guaranteed Future Value (GFV) — a lump sum due at the end of the term. At the end of a PCP agreement you can pay the GFV to own the car, use any equity as a deposit on a new car, or hand the car back subject to mileage and condition. This calculator models both using the present-value formula shown on the page.

The monthly payment uses the standard amortising loan formula, but the final balloon payment (the GFV) is first discounted to its present value: PV = B / (1 + r)^n, where r is the monthly interest rate (APR ÷ 12) and n is the number of months. The monthly payments then amortise the amount financed minus that present value. This is why PCP monthly payments are lower than HP for the same car, APR and term.

Most UK lenders expect a deposit of around 10–20% of the vehicle price, although zero-deposit deals exist. A larger deposit reduces the amount financed, which lowers both your monthly payment and total interest because interest is charged on a smaller balance. Use the deposit field to compare how much a bigger upfront payment saves over the term.

The amount financed is the vehicle price minus your deposit and any part-exchange (trade-in) value, plus any dealer fees, documentation fees and optional add-ons you choose to finance such as an extended warranty or GAP insurance. The calculator shows the amount financed separately so you can see exactly how much you are borrowing.

No. The calculator models the finance repayment only. It does not include car insurance, vehicle excise duty (road tax), MOT, servicing, fuel, or running costs. You can add dealer fees, documentation fees, extended warranty and GAP insurance costs, but running costs must be budgeted separately.