How to use the Car Finance Calculator
- 1 Enter the car price, including any extras.
- 2 Enter your deposit, including any part-exchange value.
- 3 Enter the APR and choose the term.
- 4 For PCP, enter the final payment or guaranteed future value; for HP leave it at 0.
Worked example
A £20,000 car with a £2,000 deposit on HP at 8.9% APR over 48 months. You borrow £18,000, and the monthly payment is £447.08. Interest comes to about £3,459.67, so the total payable, including the deposit, is £23,459.67.
Features
HP and PCP
Works for hire purchase with no balloon and for PCP with an optional final payment.
Total cost
Monthly payment, interest and total payable including the deposit.
Any term
24 to 60 months, the usual car finance range.
When to use it
Dealer offers
Check the monthly figure a dealer quotes before signing.
HP or PCP
Compare a lower PCP payment with owning the car outright on HP.
Bigger deposit
See how much an extra £1,000 down saves.
Bank loan comparison
Compare dealer finance with a personal loan.
Frequently asked questions
What is the difference between HP and PCP?
With hire purchase you pay off the full price over the term and own the car at the end. With PCP your monthly payments are lower because a large final payment is left, which you can pay to keep the car, hand the car back or use as a deposit on a new one.
What is a balloon payment?
The final payment on a PCP deal, usually equal to the guaranteed minimum future value of the car. You only pay it if you want to keep the car.
Is APR the same as the flat rate?
No. Dealers sometimes quote a flat rate, which looks lower. APR includes interest on the reducing balance and is the figure to compare.
Can I end car finance early?
Yes. Under the Consumer Credit Act you can settle early, or hand the car back once you have paid half the total amount payable, known as voluntary termination.
What about mileage limits?
PCP deals set a yearly mileage. Going over it usually means an excess charge per mile when you hand the car back.
Do I own a PCP car?
Not until you pay the final payment. Until then the finance company owns it, so you cannot sell it without settling the finance.
Is car finance compensation relevant?
The FCA has set up a redress scheme for some older motor finance deals with discretionary commission. It does not change the payment on a new agreement.
Will car finance affect my credit score?
Applying leaves a hard search on your credit file, and the agreement shows as a debt. Paying on time builds your credit history, while missed payments harm it.
Results are estimates based on the official rates linked above. Confirm important figures with the issuing authority or a qualified adviser before you act on them.
Reviewed by ToolsUnlocked Team · Last updated