Car Loan Calculator
Working out what a car will really cost each month is harder than it should be — dealers quote PCPs with balloon payments and HP with bigger monthlies, and a personal loan is a third option entirely. This calculator lets you compare the monthly cost across all three structures so you can see which lands easiest in your budget.
How is this calculated?
For Hire Purchase and personal loans, the financed amount (cash price minus deposit) is amortised using the annuity formula at the quoted APR. For PCP, the balloon payment (Guaranteed Minimum Future Value) is excluded from the amortisation but interest still accrues on the full balance, producing lower monthlies but a large optional final payment. The total cost figures include interest, fees, and any final balloon paid to keep the car. Excess mileage charges on PCP are excluded.
Frequently Asked Questions
PCP versus HP — which is cheaper?
Total cost over the term is usually similar; the difference is in the cash flow. PCP gives lower monthlies because you defer a chunk of the price into the balloon, but you don't own the car at the end unless you pay it. HP gives you ownership when the final payment lands but costs more each month.
Should I use a personal loan instead?
Often, yes. A personal loan gives you ownership from day one and is usually cheaper than dealer finance for borrowers with good credit. You also lose the dealer's incentive deposit contribution, so do the maths both ways including any cashback offer before deciding.
What's a typical APR on UK car finance in 2026?
Manufacturer-backed PCP deals can come in around 5%–8% APR, sometimes 0% on slow-moving stock. Independent dealer HP is typically 8%–14%. Personal loans for prime borrowers in the £10,000–£15,000 range often beat both at around 6%–7%.
Can I settle a PCP or HP early?
Yes, under the Consumer Credit Act you have a statutory right to settle early. Request a settlement figure from the lender. With PCP, voluntary termination is also available once you've paid 50% of the total amount payable, allowing you to hand the car back with no further liability if mileage and condition are within terms.
Last updated: May 2026 · Rates sourced from HMRC