Car Finance Calculator (HP and PCP)
Compare what a car will really cost under hire purchase or PCP, including the final payment.
| Deposit | £2,000 |
|---|---|
| Monthly payments (48 × £304.24) | £14,604 |
| Final payment to keep the car | £7,000 |
| Total cost if you keep the car | £23,604 |
| Total paid if you hand the car back | £16,604 |
| Interest charged | £3,604 |
| Monthly payment with no final payment (hire purchase) | £431.03 |
Estimate only. Real agreements may add fees, and PCP deals can have mileage and condition limits. Check the total amount payable on your quote.
HP or PCP: what is the difference?
Hire purchase (HP) splits the cost of the car, less your deposit, into equal monthly payments. When you make the last payment you own the car.
Personal contract purchase (PCP) keeps the monthly payments lower because you do not pay off the whole car. At the end you can hand the car back, pay the final payment (also called the balloon or GMFV) to keep it, or part-exchange it for another one.
Example: a £20,000 car with a £2,000 deposit over 48 months at 7% with a £7,000 final payment costs £304.24 a month. Without the final payment, the HP payment would be £431.03.
What to watch for with PCP
- Mileage limits, with charges for going over.
- Condition requirements if you hand the car back.
- The final payment may be worth more or less than the car at the end.
- You do not own the car until you pay the final payment.
Compare the total cost
Look at the total amount payable on your quote, which includes interest and fees. Paying a larger deposit or choosing a shorter agreement lowers the interest you pay.
Frequently asked questions
How much is a £20,000 car per month on finance?
With a £2,000 deposit at 7% over 48 months, hire purchase costs about £431.03 a month, or £304.24 with a £7,000 PCP final payment.
Is PCP cheaper than HP?
PCP has lower monthly payments, but if you want to keep the car you pay the final payment too, and the total cost can be similar or higher.
Do I need a deposit for car finance?
Not always, but a deposit lowers your payments and the interest you pay.
Can I end car finance early?
You have the right to end hire purchase and PCP agreements early once you have paid a set proportion (usually half the total amount payable). Ask your lender for details.
More from UK Answers
Figures are for the 2026/27 tax year from official sources and are estimates for guidance only, not financial or legal advice. Printed from ukanswers.co.uk.