Auto Loan Calculator
Calculate monthly car payments and total cost of an auto loan.
What this calculator does
This car finance calculator takes a vehicle price, your deposit, the APR, and the term in months, and returns the monthly payment under both of the structures UK dealerships actually offer: hire purchase, which repays the whole balance, and personal contract purchase, which defers a large optional final payment to the end.
The two monthly figures look very different, which is precisely why the total cost matters. PCP typically produces the lower monthly payment on the same car, but that is because you are financing use rather than the whole vehicle. Comparing total amounts payable, and remembering the balloon sitting at the end of the PCP, is the only fair way to read the two.
When to use it
Use it before you set foot in a showroom, because UK car finance is sold on the monthly figure almost exclusively. Deciding what monthly payment you can live with and working backwards to a price stops the conversation drifting upward into a longer term or a bigger car.
It is also the tool for the end-of-PCP decision. When your current agreement is maturing, comparing the cost of settling the optional final payment, refinancing it over a further term, or handing the car back and starting a new deal is a three-way comparison that only makes sense in total-cost terms. And if you are weighing a supermarket personal loan against dealer finance, this converts both into figures you can rank.
Understanding the inputs
Vehicle price should be the on-the-road price after any negotiated discount, and remember that a manufacturer deposit contribution effectively reduces it. Deposit combines your cash, any part-exchange equity, and that dealer contribution.
APR is the rate you have actually been offered rather than the representative figure in the advert — only 51 percent of accepted applicants need to receive the representative rate. Term in months is usually 24 to 60 on UK car finance; PCP agreements cluster at 36 and 48. The optional final payment shown for PCP is estimated at 40 percent of vehicle price, which sits in the usual range for a mainstream car on a three-year deal.
How is this calculated?
Monthly Payment = P[r(1+r)^n]/[(1+r)^n-1] where P = Vehicle Price − Down Payment.
A worked example
Take a £28,000 car with a £3,000 deposit, leaving £25,000 financed at 9.9 percent APR over 48 months. On hire purchase the monthly payment is roughly £633, and the total of payments comes to about £30,378 — so the finance costs around £5,378 and the car is yours at the end.
As a PCP with a guaranteed future value of £11,200, the monthly payment falls to roughly £442, about £191 a month less. At month 48 you then choose: pay the £11,200, refinance it, or hand the car back. The lower monthly figure buys flexibility, not a cheaper car.
Limitations and assumptions
The calculator assumes a fixed APR and no fees. It excludes the arrangement and option-to-purchase fees on HP and PCP agreements, excess mileage charges, damage recharges at handback, road tax, servicing, and insurance. The guaranteed future value is estimated at a flat 40 percent of price rather than the lender's own residual table, which varies sharply by model and mileage limit.
It also does not model voluntary termination, early settlement rebates, or the equity position at the end of a PCP, all of which depend on the actual agreement. Your pre-contract credit information and the finance quotation are the binding documents.
Common Questions
- What is the difference between PCP and HP?
- Hire purchase spreads the whole price over the term, and the car is yours once the final payment clears. Personal contract purchase defers a large chunk — the guaranteed future value — to the end, so monthly payments are lower, but you must then pay it, refinance it, or hand the car back.
- What is the optional final payment on a PCP?
- It is the guaranteed minimum future value the lender promises the car will be worth at the end of the agreement. This calculator estimates it at 40 percent of the vehicle price. If the car is worth more than the GFV at the end, that difference is equity you can put towards the next deal.
- Can I hand a PCP car back and walk away?
- At the end of the agreement, yes — that is the point of the guaranteed future value, provided you are within the mileage limit and the car meets fair wear and tear standards. Mid-agreement you have the voluntary termination right once you have paid half the total amount payable under the Consumer Credit Act.
- What happens if I go over the PCP mileage limit?
- You pay an excess mileage charge, typically somewhere between 5p and 30p per mile depending on the vehicle. On a deal capped at 8,000 miles a year, doing 12,000 for three years means 12,000 excess miles — at 10p that is £1,200 on top. Set the limit honestly at the outset rather than optimistically.
- Does this include the dealer fees and road tax?
- No. It finances vehicle price minus deposit only. Arrangement fees, the option-to-purchase fee at the end of a PCP or HP agreement, first-year vehicle excise duty, and any add-ons such as GAP insurance or a service plan sit outside the figure shown here.
- Is 0% APR car finance genuinely free?
- Sometimes, but check what you give up. Manufacturer-subsidised 0 percent deals often come instead of a deposit contribution or a cash discount available to outright buyers. Compare the total amount payable on the 0 percent deal against a personal loan at your bank's rate on the discounted price — the discount frequently wins.
- Is a personal loan cheaper than PCP?
- Often, and it also gives you ownership from day one with no mileage limit and no condition inspection. The catch is the monthly figure: a loan repaying the full price will be markedly higher than PCP payments on the same car, because PCP defers 40 percent or so of the cost to the end.
- Why is my APR higher than the rate advertised?
- Advertised rates are representative APRs, and lenders regulated by the FCA only need to offer them to 51 percent of accepted applicants. Your actual rate depends on your credit file with Experian, Equifax, or TransUnion, your income, and the deal structure. Use a soft-search eligibility checker before applying to avoid unnecessary hard searches.