Car Finance Calculator

PCP is the most popular new-car finance. You pay a deposit, then low monthly payments that only cover the car's depreciation (plus interest) over the term — not its full value. At the end you choose: pay the large balloon payment (the "Guaranteed Minimum Future Value") to own it, hand it back, or part-exchange into a new deal. Low monthlies suit people who like changing cars every few years, but mileage limits apply and you don't own the car unless you pay the balloon.

HP spreads the whole price (after deposit) over the term, so monthly payments are higher than PCP, but you own the car outright at the end with no balloon. There are no mileage limits. HP suits people who want to keep the car long-term and own it. The car is technically the lender's until the final payment, so it can be repossessed if you default.

A personal loan isn't car finance at all — you borrow the money, buy the car as a cash buyer, and own it immediately. You repay the loan separately. This often has the lowest total cost to own, gives you negotiating power as a cash buyer, and has no mileage limits — but the loan is unsecured against your wider finances and you need to qualify for the full amount.

Want the lowest monthly cost and to change cars often? PCP. Want to own the car and keep it for years at a fixed cost? HP or a personal loan, whichever has the lower APR — a loan is frequently cheapest overall. Always compare the total cost to own, not just the monthly figure, and watch PCP mileage and condition charges.

• Judging by monthly payment alone. PCP looks cheapest monthly but the balloon makes ownership dearer. Compare total cost.
• Ignoring PCP mileage limits. Excess-mileage and damage charges at the end of a PCP can be substantial.
• Forgetting you don't own a PCP car. Unless you pay the balloon, you hand it back with nothing to show for the payments.
• Not comparing a personal loan. A loan often beats dealer finance on total cost and gives cash-buyer discounts.