Car Finance Calculator

Calculate HP and PCP monthly payments — and compare total costs side by side.

Car Finance Details

PCP GMFV is typically 40–55% of car price for a 4-year term. Leave at 0 to see HP only.

🔑 HP (Hire Purchase)
£0
per month
🔄 PCP
£0
per month
DetailHPPCP

Frequently Asked Questions

What is the difference between HP and PCP? â–¼
HP spreads the full car cost over monthly payments — you own the car at the end. PCP has lower monthly payments because you only finance the depreciation (price minus GMFV balloon). At the end you can return the car, pay the balloon to own it, or trade in any positive equity. HP is simpler; PCP offers more flexibility.
Which is cheaper overall — HP or PCP? ▼
At the same APR, if you intend to own the car after the PCP by paying the balloon, HP typically costs slightly less in total. If you regularly hand the car back without paying the balloon and start a new PCP, you're always renting and will typically pay more over time.
What is the GMFV (Guaranteed Minimum Future Value)? â–¼
The GMFV is the amount the finance company guarantees the car will be worth at the end of the PCP term, and is the size of the optional balloon payment. For a 4-year PCP it's typically 40–55% of the original list price. If the car's actual market value exceeds the GMFV, you have equity — a positive contribution to your next deal.
Should I use dealer finance or a personal loan? â–¼
Dealer promotional rates (0–3% APR) can be excellent value, but these often require strong credit and are only available on new or nearly new cars. For used cars, a personal bank loan may offer a lower APR. With a personal loan you own the car outright from day one — useful if you want to sell or modify it. Always compare the total repayable amount.

How UK car finance works: PCP, HP, and PCH explained

UK car finance comes in three main forms: Hire Purchase (HP), Personal Contract Purchase (PCP), and Personal Contract Hire (PCH/leasing). Each splits the cost of car ownership differently — HP buys the car outright over time, PCP defers most of the car's value to a final balloon payment, and PCH is purely a fixed-term rental with no ownership.

Hire Purchase (HP) is the simplest: you pay a deposit (typically 10-20%), then equal monthly payments over 24-72 months. At the end, the car is yours. Monthly payments are higher than PCP for the same car because you're paying down the full purchase price plus interest. Total cost is higher than PCH/leasing but you own the asset at the end. APR ranges from 5-12% depending on credit score and lender.

Personal Contract Purchase (PCP) defers a large "Guaranteed Future Value" (GFV) until the end of the term — typically 30-45% of the car's purchase price. You pay deposit + monthly payments covering only the difference between purchase price and GFV. At term end, you choose: pay the balloon and keep the car, hand the car back with no further obligation (provided mileage and condition are within agreed limits), or trade in any equity above the GFV against a new PCP. Monthly payments are typically 30-40% lower than HP for the same car. Watch for the mileage limit — exceeding it incurs per-mile excess charges (typically 8-15p/mile).

Personal Contract Hire (PCH) — a lease — is purely rental. You pay an initial sum (usually equal to 3-12 months of rental) and a fixed monthly payment for 24-48 months. At the end, you return the car. You never own it. PCH typically has the lowest monthly cost for a given car and includes manufacturer warranty cover for the whole term. Best for drivers who prefer a new car every 2-3 years and want predictable motoring costs without resale-value risk. Modifications are not allowed and excess mileage charges still apply.