PCP vs HP car finance calculator

Compare PCP and HP car finance side by side: the monthly payment, interest, total cost and what you own at the end, from the car price, deposit and APR.

Your deal
Monthly payment on PCP
£394.23
against £565.03 a month on HP, over 48 months

PCP

Each month
£394.23
Final payment
£10,000
due in month 49, if you keep the car
Interest
£6,423
Total if you keep it
£31,423
What you own at the end
Nothing, unless you pay the final payment

HP

Each month
£565.03
Final payment
None
Interest
£4,621
Total payable
£29,621
What you own at the end
The car

PCP costs £170.80 a month less than HP, but if you pay the final payment to keep the car, it costs £1,801.60 more in total.

At the end of the PCP

Pay the final payment
£31,423 in all
and the car’s yours
Hand it back
£21,423 in all
and you own nothing. You might have to pay extra if it’s over the mileage limit or damaged.
Part-exchange it
Depends on its value
If the car’s worth more than £10,000 at the end, the difference can go towards the deposit on your next car. If it’s worth less, handing it back usually costs you less.

What you owe at the end of each monthPCPHP

APR is a yearly rate that includes compounding, so the monthly rate is (1 + APR) to the power of 1/12, minus 1, the method the FCA sets for working out APR: 9.9% APR is 0.79% a month. Both deals use the same APR, but dealers often offer different rates for PCP and HP, so try each. Payments are equal and monthly, rounded to the penny. The PCP final payment is due a month after the last monthly payment, which is why a PCP with 48 monthly payments is often quoted as 49 months. Fees are added to every total and don’t change the monthly payments; a lender’s own APR already counts its fees, so a real quote can be slightly lower. Mileage and damage charges aren’t included.

What goes in

The car price, deposit and APR come from the dealer’s quote. For PCP, the final payment is the guaranteed future value (GFV), the lender’s estimate at the start of what the car will be worth at the end. You only pay it to keep the car. Fees are any charges on top of the payments, such as an admin fee.

What the result means

HP spreads everything you borrow over the monthly payments, so the car’s yours once they’re done. PCP leaves the final payment until a month after the last monthly one, so each month costs less, but you pay interest on that final payment all the way through. In the example, a £25,000 car with £2,500 down at 9.9% APR over 48 months costs £394.23 a month on PCP with a £10,000 final payment, against £565.03 on HP. Keeping the car at the end costs £1,801.60 more on PCP.

At the end of a PCP you can pay the final payment and keep the car, hand it back, or start a new deal. If the car’s worth more than the final payment, the difference can go towards your next deposit. If you hand it back, you might pay extra if it’s over the mileage limit or damaged.

The rules behind it

APR is worked out under the FCA’s rules as a yearly rate that includes compounding, so 9.9% APR is 0.79% a month. The calculator uses that rate and matches the hire purchase example Lloyds Bank and Halifax publish to the penny: £13,000 over 48 months at 5.9% APR is £303.80 a month, or £14,592.40 in total with the £10 purchase fee.

If you took out car finance between 6 April 2007 and 1 November 2024, you may be owed compensation under the FCA’s scheme. It’s been challenged in court, parts of it have been suspended since 2 July 2026, and the case is due to be heard in December 2026 or February 2027. The FCA says: “If the scheme is upheld, and the judgment isn’t appealed, we expect payments under the scheme to begin in 2027.” This is general, not about your situation.

Sources

PCP calculator HP calculator PCP vs HP Car finance calculator Personal contract purchase Hire purchase Balloon payment Guaranteed future value Car finance APR

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