Money & Budgeting

Car Finance Calculator UK — PCP, HP & Loan Comparison

Calculate car finance costs and compare PCP, HP, and personal loans. Work out monthly payments, total costs, and which finance option is best for you.

By PocketWise · · 5 min read

Understanding car finance helps you choose the best deal. Here’s how to calculate and compare your options.

Finance Types Explained

Quick Comparison

Feature PCP HP Personal Loan
Own car at end Optional (pay balloon) Yes Yes
Monthly payments Lowest Medium Highest
Total cost Highest if buying Medium Lowest
Flexibility High Lock in Very high
Mileage limits Yes No No
Deposit required Typically 10%+ Typically 10%+ No

How Each Works

Finance Type How It Works
PCP Pay deposit + monthly payments covering depreciation, balloon payment to own
HP Pay deposit + monthly payments covering full cost, own at end
Personal Loan Borrow full amount, pay back with interest, own from day 1
Lease Rent the car, return at end, never own

Monthly Payment Calculator

PCP Formula

Monthly payment = (Car price - Deposit - Guaranteed Future Value) ÷ Term months + Interest

HP Formula

Monthly payment = (Car price - Deposit + Total interest) ÷ Term months

Example: £25,000 Car

Element PCP HP Loan
Car price £25,000 £25,000 £25,000
Deposit £2,500 (10%) £2,500 (10%) £0
Amount financed £22,500 £22,500 £25,000
Term 48 months 48 months 48 months
APR 8.9% 8.9% 7.9%
Balloon (PCP) £10,000 N/A N/A
Monthly payment £301 £556 £609
Total interest £2,948 £4,188 £4,232
Total if buying £29,948 £29,188 £29,232

Detailed Payment Tables

PCP Payments (8.9% APR)

Car Price Deposit Term Balloon Monthly Total
£15,000 £1,500 48 mo £5,500 £193 £17,764
£20,000 £2,000 48 mo £7,500 £253 £23,644
£25,000 £2,500 48 mo £10,000 £301 £29,448
£30,000 £3,000 48 mo £12,000 £361 £35,328
£35,000 £3,500 48 mo £14,000 £421 £41,208
£40,000 £4,000 48 mo £16,500 £469 £46,912

HP Payments (8.9% APR)

Car Price Deposit Term Monthly Total
£15,000 £1,500 48 mo £331 £17,388
£20,000 £2,000 48 mo £441 £23,168
£25,000 £2,500 48 mo £551 £28,948
£30,000 £3,000 48 mo £662 £34,776
£35,000 £3,500 48 mo £772 £40,556
£40,000 £4,000 48 mo £882 £46,336

Personal Loan Payments (7.9% APR)

Loan Amount Term Monthly Total Interest Total
£10,000 48 mo £243 £1,664 £11,664
£15,000 48 mo £365 £2,520 £17,520
£20,000 48 mo £487 £3,376 £23,376
£25,000 48 mo £609 £4,232 £29,232
£30,000 48 mo £730 £5,040 £35,040
£40,000 60 mo £810 £8,600 £48,600

APR Impact on Payments

£20,000 Finance Over 48 Months

APR Monthly (HP) Total Interest Total Cost
0% £375 £0 £18,000
4.9% £414 £1,872 £19,872
6.9% £432 £2,736 £20,736
8.9% £451 £3,648 £21,648
12.9% £489 £5,472 £23,472
19.9% £556 £8,688 £26,688

PCP vs HP Total Cost Comparison

Scenario: £25,000 Car, 48 Months, 8.9% APR

If You… PCP Cost HP Cost Difference
Return car £16,948 N/A N/A
Buy car (pay balloon) £26,948 £26,448 HP £500 cheaper
Trade in for new Start fresh N/A PCP more flexible

The PCP Cycle Trap

Cycle What Happens
End of PCP Trade equity for new car
Repeat Never own, always paying
10 years Could have paid for 2 cars
Alternative HP then own, save payments

Deposit Impact

Effect of Larger Deposit (£25,000 Car, HP, 48mo, 8.9%)

Deposit Deposit % Monthly Total Interest Total Cost
£0 0% £612 £4,376 £29,376
£2,500 10% £551 £3,968 £26,468
£5,000 20% £490 £3,520 £28,520
£7,500 30% £429 £3,092 £28,092
£10,000 40% £367 £2,616 £27,616

Deposit Decision

Consideration Guidance
Emergency fund Keep 3-6 months expenses
Interest rate If low, smaller deposit OK
Cash return elsewhere If savings beat car APR
Negative equity risk Larger deposit = less risk

Term Length Impact

£20,000 HP at 8.9% APR

Term Monthly Total Interest Total
24 months £914 £1,936 £21,936
36 months £630 £2,680 £22,680
48 months £489 £3,472 £23,472
60 months £405 £4,300 £24,300

Trade-Off

Shorter Term Longer Term
Higher monthly Lower monthly
Less total interest More total interest
Own car sooner Longer until ownership
Less negative equity risk More risk

Mileage Considerations (PCP)

Excess Mileage Charges

Mileage Allowance Excess Charge
8,000 miles/year 5-15p per mile
10,000 miles/year 5-15p per mile
12,000 miles/year 5-15p per mile

Cost of Exceeding Mileage

Miles Over At 8p/mile At 12p/mile
2,000 £160 £240
5,000 £400 £600
10,000 £800 £1,200
20,000 £1,600 £2,400

0% Finance Deals

Reality Check

Apparent Benefit Reality
0% APR No interest
But often Higher cash price
Or Reduced part-exchange
Or Large deposit required
Always compare True cash price vs finance

Comparing a 0% Deal

Option Cash Price Finance Deal
With discount £22,000 £25,000 at 0%
Saving £3,000 less £0 interest
True cost £22,000 £25,000
Better option Cash/loan Pay more

Early Settlement

How It Works

Finance Type Settlement Amount
HP Outstanding balance + fees
PCP Outstanding balance + balloon
Loan Outstanding balance

Settlement Calculation Example (HP)

Element Amount
Original loan £20,000
Paid (24 months) £9,792
Settlement figure ~£10,800
Includes Remaining capital + interest rebate
Saving Some interest avoided

Voluntary Termination (VT)

Rule Details
Right Return car if paid 50%
Applies to HP and PCP
Condition Car in good condition
Useful when Negative equity situation

Which Finance Is Best?

Choose PCP If:

Situation Why PCP
Want lowest payments Only paying depreciation
Change cars often Flexibility at end
Uncertain future Options to return
Moderate mileage Stay within limits

Choose HP If:

Situation Why HP
Want to own Car is yours at end
Keep cars long-term No balloon to pay
High mileage No limits
Prefer simplicity Straightforward

Choose Personal Loan If:

Situation Why Loan
Excellent credit Best rates available
Want ownership immediately No finance company lien
Flexible budget Can afford higher payments
Cash buyer discount Negotiate as cash buyer

Summary

Finance Type Best For
PCP Lower payments, flexibility
HP Ownership, high mileage
Loan Best rate, immediate ownership
Key Numbers Impact
APR Lower = cheaper
Deposit Higher = lower monthly
Term Longer = lower monthly but more interest
Total cost Most important number

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Sources

  1. FCA — Car finance