UK Car Finance Calculator (PCP vs. HP) (2026)
Compare UK Personal Contract Purchase (PCP) vs. Hire Purchase (HP) car finance: monthly payments, interest, and balloon costs.
United Kingdom Calculator
Adjust Your Inputs
Move the sliders or type exact numbers. Results update instantly.
Instant Estimate
Your Results
PCP Monthly Payment
£429
Based on your selected car finance uk assumptions. Try different sliders to compare scenarios.
HP Monthly Payment
£621
Total PCP Cost (If Kept)
£34,607
Total HP Cost
£32,805
These are planning estimates, not tax, legal or investment advice. Country rules, lender policies and tax rates can change.
How to Use the Car Finance UK
Enter vehicle price & deposit
Input total showroom price and your upfront cash or part-exchange deposit.
Set APR and contract duration
Enter finance interest rate and repayment period (36, 48, or 60 months).
Enter PCP balloon payment (GMFV)
Input dealer Guaranteed Minimum Future Value to compare monthly payments against Hire Purchase (HP).
Formula & Calculation Methodology
PCP = Depreciation & Balloon Interest | HP = Full Loan AmortizationThis calculator uses standard United Kingdom financial formulas, IRS thresholds, and amortization schedules. All results compute instantly in your browser with zero data stored or transmitted.
Calculation Examples & Scenarios
Mid-Size Family SUV (£28,000 Vehicle)
GBP 28,000 vehicle, GBP 3,000 deposit, 8.9% APR, 48 months, GBP 11,000 PCP balloon payment.
Compact Commuter Car (£16,000 Vehicle)
GBP 16,000 vehicle, GBP 2,000 deposit, 7.9% APR, 36 months, GBP 7,000 balloon.
Key Benefits
- Direct side-by-side comparison of PCP and HP monthly commitments
- Accurately calculates total interest paid including balloon payment carrying costs
- Helps buyers negotiate effectively with car dealerships and independent brokers
Common Use Cases
- Drivers deciding between upgrading vehicles every 3-4 years (PCP) vs long-term ownership (HP)
- Budget-conscious car buyers evaluating monthly affordability vs end-of-term balloon liabilities
- Motorists reviewing voluntary termination rights under the Consumer Credit Act
PCP vs HP: Understanding the Core Differences
Personal Contract Purchase (PCP) defers a large proportion of the car’s cost to the end of the agreement as a Guaranteed Minimum Future Value (balloon payment). This produces substantially lower monthly payments, but you do not own the vehicle unless you pay the final balloon.
Hire Purchase (HP) spreads the entire purchase price plus interest across your agreed monthly installments. Once the final monthly payment is made, you own the car outright with no balloon fee.
End of PCP Agreement Options
At the conclusion of a PCP contract, you have three clear choices: 1) Pay the optional final balloon payment to keep the vehicle; 2) Hand the car back to the finance provider with nothing more to pay (assuming mileage and condition limits are met); or 3) Part-exchange the car and use any equity above the GMFV toward your next vehicle deposit.
Frequently Asked Questions
With Hire Purchase (HP), you pay off the full value of the vehicle plus interest across the term and automatically own the car at the end. With Personal Contract Purchase (PCP), payments are lower because you only pay for depreciation, but you must pay a large balloon payment (GMFV) at the end if you want to keep the vehicle.
You have three choices: pay the optional balloon payment (GMFV) to own the car, hand the car back with nothing more to pay (subject to mileage and condition), or trade it in against a new car using any positive equity.
HP is almost always cheaper in total interest costs if you intend to keep the car long-term, because you pay off the loan balance faster rather than carrying interest on a large final balloon amount.
Yes. Under the Consumer Credit Act Voluntary Termination clause, you have the legal right to hand the car back once you have paid at least 50% of the total amount payable.
Competitive dealer and broker APRs typically range between 6.9% and 9.9% for good credit, with zero-deposit or manufacturer subvented 0% promotional rates available on select new vehicles.
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