PCP & Car Finance Calculator UK
Calculate monthly car finance payments or find your early settlement / payoff figure. Free UK PCP, HP and car loan calculator.
Monthly Payment
£487.32
Total Interest
£3,391
Total Cost
£28,391
Finance Breakdown
Related Calculators
Important: Car finance is subject to status. Representative APR examples are for illustration only. Actual rates depend on your credit score, lender, and deal type (PCP, HP, or personal loan). Settlement figures are estimates, always request an official settlement quote from your lender. This calculator does not constitute financial advice. Last verified: October 2026.
PCP vs HP: What's the Difference?
PCP (Personal Contract Purchase)
Lower monthly payments because you're only financing the car's depreciation, not its full value. Ends with a large optional "balloon payment" to own the car outright, or hand it back.
HP (Hire Purchase)
Higher monthly payments because you're financing the full car price. You automatically own the car once the final payment is made, no balloon payment.
Understanding the "Half Rule"
Under the Consumer Credit Act, once you've paid 50% of the total amount payable under your HP or PCP agreement (including your deposit), you have the right to voluntarily terminate the agreement and hand the car back with nothing more to pay, provided the car is in reasonable condition. This is a useful safety net if your circumstances change.
Watch Out for These Extra Costs
Beyond the monthly payment, budget for excess mileage charges (PCP agreements set a mileage cap, going over means paying per extra mile at the end), wear-and-tear charges if the car isn't returned in a reasonable state, and GAP insurance if you want to cover the difference between what you owe and the car's value if it's written off.
Worked Example: £20,000 Car on HP
You buy a £20,000 car with a £2,000 deposit, leaving £18,000 to finance over four years at 8% APR. The monthly payment is around £440. Over 48 months you repay roughly £21,100, plus your £2,000 deposit, so the car costs about £23,100 in total. That means roughly £3,100 of the cost is interest. Stretching the term to five years would lower the monthly payment but add more interest overall. A PCP deal on the same car would show a lower monthly payment, with a final balloon payment to find if you want to keep it.
Frequently Asked Questions
Is a bigger deposit worth it?
Usually yes. It reduces the amount you borrow, so you pay less interest and your monthly payment falls.
What happens at the end of a PCP?
You can pay the balloon payment to keep the car, hand it back (subject to mileage and condition), or part-exchange it towards a new one.
Can I pay off car finance early?
Generally yes. Ask your lender for a settlement figure. Early repayment can reduce the interest you pay, though some agreements include a charge.
Is the APR the same as the interest rate?
No. APR includes certain fees and shows the yearly cost of borrowing, so it is the better figure for comparing deals. The flat or quoted rate can look lower than the real cost.
⚠️ Important Disclaimer
Car finance is subject to status. This calculator provides illustrative estimates only; settlement figures are approximate and you should always request an official settlement quote from your lender before making a decision. Not financial advice.
Frequently Asked Questions
What is a good APR for car finance?
As of 2026, typical car finance APRs range from 5.9% to 9.9% depending on your credit score. Representative APR examples are usually around 7.9%.
How much deposit should I put down?
Most lenders recommend at least 10-20% deposit. A larger deposit reduces your monthly payments and total interest.
What loan term is best?
Common terms are 3-5 years. Longer terms mean lower monthly payments but higher total interest costs.
How do I calculate my early settlement figure?
Your early settlement figure is roughly the outstanding balance plus any early repayment charge (usually 1-2 months interest). Use the Early Settlement tab above to calculate your exact figure.
Can I pay off PCP or HP car finance early?
Yes, under the Consumer Credit Act you have the right to settle early at any time. You may also be able to use the "half rule" to hand the car back once you've paid 50% of the total amount payable.
Key Terms Explained
Plain-English definitions of the financial terms used in this calculator.
- APR (Annual Percentage Rate)
- The yearly cost of borrowing, including interest and standard fees, expressed as a percentage. APR lets you compare loans, credit cards and mortgages on a like-for-like basis, a lower APR means cheaper borrowing.
- Principal
- The original amount borrowed or invested, before any interest. On a repayment mortgage or loan, each monthly payment covers interest plus a slice of the principal until the balance reaches zero.
- Amortisation
- The gradual repayment of a loan through fixed regular payments. Early payments are mostly interest; later payments are mostly principal. An amortisation schedule shows this split month by month.
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Not Financial Advice: This calculator is for informational and educational purposes only. Results are estimates and do not constitute financial advice, recommendations, or regulated advice. We are not authorised or regulated by the Financial Conduct Authority (FCA). Always consult a qualified financial adviser for personalised advice. Tax treatment depends on your individual circumstances and may change. Tax laws and rates may change. Past performance does not guarantee future results.
