Car Finance Calculator UK
Estimate UK car finance repayments for PCP or Hire Purchase. Enter the price, deposit, optional final payment and APR to see your monthly payment and total cost.
Last updated 21 June 2026 · Written and reviewed by Mustafa Bilgic
Car finance calculator
PCP or HP — monthly + total payable.
Estimate only — figures use the latest published UK rates. Always confirm on GOV.UK.
How does car finance work?
Most UK car finance is either Hire Purchase (HP) or Personal Contract Purchase (PCP). With HP you spread the whole car price (less your deposit) over the term and own the car at the end. With PCP you defer a big chunk of the value to an optional final payment (the "balloon" or guaranteed minimum future value), which makes the monthly payments lower — but you only own the car if you pay that final lump sum.
An £18,000 car with a £2,000 deposit and a £6,000 balloon at 9.9% APR over 36 months works out at roughly £372 a month on PCP, with the £6,000 due at the end if you want to keep it.
How the calculator works
The tool takes the amount you actually finance (car price minus deposit), then amortises it over your term while holding back the optional final payment so interest is still charged on it. That mirrors how PCP works: lower monthly payments, but a large sum left to pay or refinance at the end. Set the final payment to £0 and it behaves exactly like a Hire Purchase agreement, where the car is fully paid off.
PCP vs HP — which is cheaper?
PCP usually has lower monthly payments but a higher total cost if you buy the car, because you pay interest on the deferred balloon too. HP costs more each month but you own the car outright at the end with nothing left to pay. PCP suits drivers who like to change cars every few years and may hand the car back; HP suits those who want to own and keep it.
Things to check before signing
Look at the total amount payable, not just the monthly figure, and check the annual mileage limit on PCP — going over it brings excess-mileage charges. Compare the dealer's APR with a personal loan, which can sometimes be cheaper and lets you own the car immediately. The MoneyHelper service has a useful guide to car finance options.
Frequently asked questions
What is the difference between PCP and HP car finance?
Hire Purchase (HP) spreads the full price over the term and you own the car at the end. PCP defers a large optional final payment, giving lower monthly payments, but you only own the car if you pay that balloon sum at the end.
What is the balloon payment on car finance?
The balloon, or guaranteed minimum future value, is a large optional final payment on a PCP deal. It is the lender's estimate of the car's value at the end. Pay it to keep the car, or hand the car back instead.
Is car finance cheaper than a personal loan?
Not always. Dealer finance can have promotional rates, but a personal loan often has a competitive APR and lets you own the car immediately with no mileage limits. Compare the total amount payable on both.
Does a bigger deposit lower my payments?
Yes. A larger deposit reduces the amount you finance, so both your monthly payments and the total interest fall. It can also help you qualify for a better APR.
Can I end a car finance agreement early?
Often yes. Under UK rules you can usually hand a car back once you have paid half the total amount payable (voluntary termination), or settle the agreement early. Check your contract for any charges.