PCP
Cheapest Monthly- Total Interest
- $5,347.75
- Total Payable
- $27,847.75
- + Balloon Due at End
- $10,000.00
Car Finance Calculator
Compare PCP, Hire Purchase, and a bank loan side by side for the same car: monthly payment, total interest, and total amount payable.
GFV (Guaranteed Future Value) is the lump sum due at the end of a PCP agreement if you want to keep the car — hand it back instead and you owe nothing more (subject to condition and mileage). A typical GFV is 35-45% of the car's price; adjust it to your actual dealer quote.
Quick Examples:
Hire Purchase
Cheapest Monthly- Total Interest
- $3,865.96
- Total Payable
- $26,365.96
- You Own the Car
- At final payment
Bank Loan
Cheapest Monthly- Total Interest
- $4,839.75
- Total Payable
- $27,339.75
- You Own the Car
- Immediately (cash purchase)
PCP's low monthly payment doesn't include the balloon (GFV) you'd need to pay to actually own the car at the end — factor that in before comparing PCP's headline monthly figure against HP or a loan. APR shown is what you enter here, not a live rate feed; use your own dealer or bank quote for an accurate comparison.
About this tool
How to use it
- Enter the car's price, your deposit, and the finance term in months.
- Enter the dealer's APR (used for both PCP and Hire Purchase quotes) and a separate bank loan APR — banks and dealer finance often quote different rates for the same buyer.
- For PCP, enter the balloon payment (GFV) from your dealer's quote — this is the lump sum due at the end if you want to keep the car.
- Click Calculate Finance and compare all three monthly payments side by side, then check the summary banner for which one actually costs least overall.
Why it matters
PCP's monthly payment is almost always the lowest of the three because you're only financing the difference between the car's price and its balloon value, not the whole car — but that headline number hides the fact that you still owe the balloon if you want to actually own the car. Comparing PCP, HP, and a bank loan by total cost of ownership, not just monthly payment, is the only way to see which one is actually cheapest for what you're trying to do: own the car outright, or keep payments low and decide later.
When to use it
Before signing a dealer finance quote, when you want to know if the bank loan you're eligible for beats what the dealer is offering. When you're deciding between PCP and HP for the same car and the salesperson is only showing you the monthly payment. When your PCP agreement is coming up for renewal and you're deciding whether to pay the balloon, hand the car back, or refinance.
Good to know
This models PCP and HP as a standard interest-bearing amortizing loan (with the balloon treated as a final lump-sum payment for PCP), which is how most dealer finance actually works, but real agreements can include arrangement fees, purchase fees, or excess mileage charges not modelled here. Bank loan terms, especially APR, vary significantly by lender and your credit profile — the default is a reasonable planning assumption, not a quote. Always get the real APR and any fees from your actual finance offer before deciding.
Common questions
Is PCP or HP cheaper overall?
Hire Purchase is very often cheaper overall if you intend to keep the car, because PCP defers a large chunk of the car's value into a balloon payment that still has to be paid (or refinanced) to actually own the car — and interest accrues on that deferred amount too. PCP usually only wins on the lowest monthly payment, not on total cost.
What happens if I don't pay the PCP balloon payment?
You simply hand the car back to the finance company at the end of the agreement and owe nothing further, provided it's within the agreed mileage and condition limits — excess mileage or damage charges can apply. This is the core trade-off of PCP: lower monthly payments in exchange for not automatically owning the car at the end.
Why would a bank loan have a different rate than the dealer's finance?
Dealers sometimes offer subsidized or promotional APRs (funded partly by the manufacturer) to move a specific car, which can beat a standard personal loan rate — but not always. A bank loan can also be cheaper if your dealer's rate is a standard commercial rate rather than a promotional one, which is exactly why comparing both real quotes matters more than assuming either one is automatically better.
Should I put down a bigger deposit?
A bigger deposit reduces the amount financed, which lowers both your monthly payment and your total interest under any of the three options — it's rarely a bad move if you have the cash and don't need it elsewhere. Run the numbers with a larger deposit here to see exactly how much it saves before deciding.