Estimate your monthly car finance payment and compare PCP with HP.
Assumes a fixed APR with no fees. The balloon is the optional final payment if you choose to keep the car.
| PCP | HP | |
|---|---|---|
| Monthly | £0 | £0 |
| Final payment | £0 | £0 |
| Interest | £0 | £0 |
| Total payable | £0 | £0 |
Thinking about financing your next car? This PCP calculator estimates your monthly payment on a personal contract purchase deal from the car price, deposit, APR, term and balloon payment. It also shows the same deal as hire purchase, and the independent MoneyHelper guide to car finance explains both options in detail, so you can weigh a lower monthly cost against a higher total before you sign anything.
What Is PCP Car Finance?
With PCP you pay a deposit, then monthly payments that cover the car's expected loss in value plus interest. At the end you choose to hand the car back, part exchange it, or pay the balloon, also called the guaranteed minimum future value (GMFV), to own it. Because the balloon is deferred, monthly payments are lower than a standard loan.
The calculator uses the annuity formula with a balloon: P = (PV − B ÷ (1 + r)^n) × r ÷ (1 − (1 + r)^−n), where PV is the price minus deposit, B the balloon, n the number of months and r the monthly rate taken from the APR. For a £25,000 car with £3,000 down, 9.9% APR, 48 months and a £10,000 balloon, the payment is about £380 a month.
How to Use the PCP Calculator
Step 1: Enter the Car Price and Deposit
Type the cash price of the car and the deposit you plan to put down, including any part exchange value or dealer deposit contribution.
Step 2: Add the APR and Choose a Term
Enter the representative APR from the quote and pick 24, 36 or 48 months. Longer terms lower the monthly cost but add more interest.
Step 3: Enter the Balloon Payment
Add the GMFV shown on the quote. It assumes an annual mileage limit, and if you drive for work the mileage allowance calculator shows what your employer can repay tax free for those miles. Leave the balloon blank to see a deal with no final payment, which works out the same as hire purchase.
Step 4: Compare PCP and HP
You will see your monthly payment, total payable, total interest and the balloon, plus a side by side table with HP. Running costs matter too, so the MPG calculator helps you budget for fuel alongside the monthly payment. Use the comparison to decide whether you value lower monthly payments or a lower overall cost.
PCP Payment Examples
| Car price | Deposit | APR and term | Balloon | Monthly payment |
|---|---|---|---|---|
| £20,000 | £3,000 | 7.9% over 36 months | £8,000 | £331.33 |
| £25,000 | £3,000 | 9.9% over 48 months | £10,000 | £380.33 |
| £30,000 | £3,000 | 9.9% over 48 months | £13,000 | £454.24 |
| £35,000 | £5,000 | 6.9% over 36 months | £14,000 | £569.84 |
If you want to own the car outright with no balloon at the end, compare these figures with hire purchase, which spreads the full amount over the term. Real quotes may also include an option to purchase fee and excess mileage charges, so always check the total amount payable on the finance agreement.
Frequently Asked Questions
How is a PCP monthly payment calculated?
The lender takes the price minus your deposit, removes the present value of the balloon, then spreads the rest plus interest over the term. The balloon is paid only if you keep the car.
What is a GMFV on PCP?
The guaranteed minimum future value is what the lender predicts the car will be worth at the end of the deal. It sets the balloon payment you pay to keep the car.
Is PCP cheaper than HP?
PCP is cheaper each month, but usually more expensive overall if you pay the balloon, because you pay interest on the deferred amount for the whole term.
What happens at the end of a PCP deal?
You can hand the car back with nothing more to pay (subject to mileage and condition), pay the balloon to own it, or use any equity towards a new car.
Does a bigger deposit lower PCP payments?
Yes. Every extra pound of deposit reduces the amount you borrow, which lowers both the monthly payment and the total interest.
Is the APR the same as the flat rate?
No. APR includes compounding and any compulsory fees, so it is higher than a flat rate on the same deal. Always compare quotes using the APR.