PCP Calculator UK: Monthly Car Finance Payments

PCP and car finance calculator

See what a car finance deal really costs. Enter a balloon payment for PCP, or leave it at zero for hire purchase (HP).

Enter the deal to see the monthly payment.

PCP or hire purchase?

Personal contract purchase (PCP) sets aside part of the price as a final "balloon" payment, the guaranteed minimum future value (GMFV). Your monthly payments cover the rest plus interest on the whole amount borrowed. At the end you can pay the balloon and keep the car, hand it back, or trade it in.

Hire purchase (HP) spreads the whole price over the term. Monthly payments are higher, but you own the car after the last one and there is no mileage limit.

	PCP	HP
Monthly payment	Lower	Higher
Total interest	Higher, because the balloon is borrowed for the whole term	Lower
Own the car at the end	Only if you pay the balloon	Yes
Mileage limit	Yes, with excess charges	No
Condition charges on return	Yes	Not applicable

How the monthly payment is worked out

Lenders use the APR to find a monthly rate, then calculate the fixed payment that repays the borrowed amount, less the present value of the balloon, over the term. This calculator uses the same method, so results should be within a few pounds of a real quote at the same APR. Differences come from fees and the exact timing of payments.

Monthly rate r = (1 + APR)^1/12 − 1
Payment = (amount borrowed − balloon ÷ (1 + r)ⁿ) × r ÷ (1 − (1 + r)⁻ⁿ)

Before you sign

Compare the total amount payable, not just the monthly figure.
On PCP, set the annual mileage honestly. Excess mileage typically costs 5p to 15p a mile.
You have a legal right to voluntary termination once you have paid half the total amount payable (including the balloon), under the Consumer Credit Act 1974.
You have 14 days to withdraw from a finance agreement after signing.

Car finance compensation

The Financial Conduct Authority is running a redress scheme for motor finance agreements taken out between 2007 and 2024 where commission was not properly disclosed. If you had car finance in that period, check the FCA's consumer pages before paying a claims firm: you do not need one to be included.

Sources

Rates and rules last checked 15 October 2026. These figures are a guide. For a decision that matters, confirm with the official source.

Questions

How is a PCP monthly payment calculated?

The lender takes the price minus your deposit, sets aside the balloon payment, and charges interest on the whole amount borrowed. Your monthly payment repays everything except the balloon, plus interest.

Is PCP cheaper than HP?

PCP has lower monthly payments, but usually costs more in interest in total because the balloon is borrowed for the whole term. HP costs less overall if you want to keep the car.

What is a GMFV?

The guaranteed minimum future value: what the lender guarantees the car will be worth at the end of a PCP. It is also the optional final payment to own the car.

Can I end a car finance deal early?

Yes. You can settle early at any time, or use voluntary termination to hand the car back once you have paid half the total amount payable.