Free Finance Tool
Car Finance Calculator
Calculate monthly payments and compare PCP, HP, and personal loan options. See the true cost of car finance before you commit.
Compare Finance Options
PCP
Personal Contract Purchase
- Lowest monthly payments
- Flexibility at end of term
- Mileage limits apply
- Large balloon payment to own
HP
Hire Purchase
- Own car at end of term
- No mileage restrictions
- No balloon payment
- Higher monthly payments
Personal Loan
Bank or Building Society
- Own car from day one
- Often lower APR rates
- Buy from anywhere
- Need good credit score
Example: £15,000 Car Finance
With £1,500 deposit, 48 months, 8.9% APR
PCP
£205/mo
+ £5,250 balloon payment
Total if you keep car
£16,586
HP
£335/mo
No balloon - you own it
Total cost
£17,595
Loan (6.9%)
£323/mo
Own from day one
Total cost
£16,987
*Calculated using compound interest formula. Actual rates depend on your credit score and lender.
Car Finance Tips
Compare Total Cost, Not Monthly
A lower monthly payment often means paying more in total. Always compare the total amount payable across different options.
Bigger Deposit = Less Interest
The more you put down upfront, the less you borrow and the less interest you pay. Aim for at least 10% if possible.
Shorter Term = Lower Total Cost
36 months costs less than 48 months in total interest, even though monthly payments are higher. Find your balance.
Get Pre-Approved First
Know what rate you qualify for before visiting dealers. This gives you negotiating power and prevents surprises.
Learn More About Car Finance
Our detailed guides explain everything you need to know
Frequently Asked Questions
What is the difference between PCP and HP?
What is the difference between PCP and HP?
PCP (Personal Contract Purchase) has lower monthly payments but a large balloon payment at the end to own the car. HP (Hire Purchase) has higher monthly payments but you own the car outright at the end with no final payment. PCP is better for lower monthly costs, HP is better for ownership.
What APR should I expect on car finance?
What APR should I expect on car finance?
Typical APRs range from 6-15% depending on your credit score, the lender, and whether it is dealer or independent finance. Manufacturer finance deals sometimes offer 0% APR on new cars. Always compare the total amount payable, not just the APR.
Is a personal loan better than car finance?
Is a personal loan better than car finance?
Personal loans often have lower interest rates than dealer finance and you own the car outright from day one. However, you need good credit to qualify for the best rates. Car finance is easier to get approved and can include extras like warranties.
What deposit should I put down on car finance?
What deposit should I put down on car finance?
Typically 10-20% of the car price. A larger deposit means lower monthly payments and less interest paid overall. Some deals offer £0 deposit but you will pay more in total. Put down as much as you can comfortably afford.
Can I pay off car finance early?
Can I pay off car finance early?
Yes, you have the right to settle car finance early. You may have to pay up to 58 days extra interest plus any fees in your agreement. With PCP, you can also hand the car back after paying 50% of the total (Voluntary Termination).
What happens at the end of PCP?
What happens at the end of PCP?
You have three options: 1) Pay the balloon payment and keep the car, 2) Hand the car back with nothing more to pay (if within mileage/condition limits), or 3) Use any equity as deposit on a new PCP. Most people choose option 2 or 3.