Car Finance Calculator

Enter the car price, deposit, APR and term to estimate your monthly payment on HP or PCP, plus total interest and cost.

Estimate monthly payments for hire purchase (HP) or PCP. For PCP, enter the optional final payment (GMFV).

How car finance payments work in the UK

The two most common ways to finance a car in the UK are hire purchase (HP) and personal contract purchase (PCP). With HP you pay off the full price in monthly instalments and own the car at the end. With PCP the monthly payments are lower because they only cover the car’s expected depreciation, and you then choose to hand the car back, pay the final payment (the guaranteed minimum future value, GMFV) to keep it, or part-exchange it.

What goes into the payment

  • Price and deposit: the amount financed is the price minus your deposit.
  • APR: the representative annual cost of the credit. This calculator converts it to an equivalent monthly rate.
  • Term: usually 24 to 60 months; longer terms lower the payment but raise total interest.
  • Final payment (PCP): the lump sum due at the end if you want to keep the car.

Example

A £20,000 car with a £2,000 deposit over 48 months at 8.9% APR on HP costs about £444 a month and £3,300 in interest. On a PCP with a £7,000 final payment the monthly payment is about £321 (the final £7,000 is on top), but you only own the car if you pay the £7,000.

Figures are estimates, not a credit offer; the lender’s quote and your credit profile decide the actual rate. Watch for mileage limits and excess wear charges on PCP, and check for early repayment terms. Related: car loan calculator and personal loan calculator.

How to use the car finance calculator

  1. Enter the car price, your deposit, the APR and the term in months.
  2. For PCP, add the final payment (GMFV).
  3. Read the monthly payment, amount financed, total interest and total cost.

Frequently asked questions

What is the difference between HP and PCP?

HP pays off the whole car, so you own it at the end. PCP has lower payments and a final payment; you can pay it to keep the car, return it or part-exchange.

How is a car finance payment calculated?

The amount financed (price minus deposit, minus the present value of any final payment) is spread over the term with interest at the monthly equivalent of the APR.

What is a GMFV?

The guaranteed minimum future value: the amount the lender guarantees the car is worth at the end of a PCP, which is also the final payment if you want to keep it.

Is a longer car finance term better?

It lowers the monthly payment but increases total interest and leaves you more exposed to negative equity.

Is the APR the same as the interest rate?

No. The APR is the representative annual cost of credit; the actual rate you pay is shown in your agreement.

Related tools: Car loan calculator · Personal loan calculator · UK take-home pay calculator

← All tools