Car finance calculator

How to use our car finance calculator

There are various ways to finance a car, with the most popular options being PCP, HP, or taking out a personal loan. Our car finance calculator allows you to choose from any of these options to see what your repayment plan would look like.

Regardless of the type of finance you choose, you will need to select how much you want to borrow, select the term of the loan and the APR. If you are taking out a PCP or HP agreement, you will need to enter your deposit, including any dealer contribution. Where you are calculating the cost of a PCP agreement, you will also need to enter the amount of the balloon payment, which is also known as the GMFV (Guaranteed Minimum Future Value) or option to purchase fee.

Once you’ve entered all of the required details, we will calculate your monthly repayments, the total amount you’re borrowing and the total amount repayable, including the interest. Reducing the length of the loan will increase your monthly repayments but lower the total amount you repay over the course of the finance agreement.

What are the different types of car finance?

There’s a lot to consider when you’re buying a car and unless you’re buying a car with cash, one of the biggest choices to make is which of the available car finance options to choose from.

There are a couple of main car financing options. If you’re looking at financing a car with the view to own the car or have the option to buy the car at the end of the agreement, the most popular options are PCP, HP or a personal loan. If you have no interest in owning a car at the end of a finance agreement, you may instead want to explore personal car leasing (PCH).

Personal contract purchase usually requires the buyer to pay a deposit, followed by regular monthly payments for the duration of the finance agreement. At the end of the contract, you will have the chance to either return the car to the finance company, pay the balloon payment (GFV) to purchase the car or use the equity in the vehicle towards another car if you’re part exchanging.

Hire purchase is similar to PCP, but without the balloon payment at the end of the agreement. Instead, you will usually pay a deposit, followed by regular monthly payments and a small ‘option to purchase’ fee at the end of the agreement. The monthly costs are generally higher than if you choose PCP, however, you will own the car at the end of the agreement for a nominal fee.

Hire purchase and a personal bank loan are essentially the same in terms of how the payments are structured. You will need to get approved for a loan and will get the cash in your bank. You will then use the funds from the loan and any savings you have to buy the car outright. This means that you will own the car straight away, whereas if you opted for Hire Purchase finance, you don’t own the car until you’ve made all monthly payments and paid the ‘option to purchase’ fee.

Things to consider when taking out car finance

When taking out finance, it is important to make sure that you can afford the monthly repayments. If you fail to make the repayments, the car may be seized by the finance company and have a negative impact on your chances of getting credit in the future. You can check the affordability of the monthly repayments by finding out how much you’ll be paying using our calculator.

When taking out finance, you should also take into consideration the overall cost of the loan, rather than just the monthly repayments. Our finance calculator will allow you to transparently see the total amount you’re borrowing, as well as the total amount repayable. It is recommended that you shop around for the lowest APR to ensure you aren’t paying more interest than you need to.

What do I need to apply for car finance?

To apply for car finance, you may need:

• Your bank account details
• Your car’s registration plate
• Your address, occupation and income details
• A contact number or email address

Are there any other costs involved?

Our car finance calculator will calculate the costs of the finance agreement, but there may be some other costs when buying a car. If you buy a car from a dealership, they may offer you extra products such as extended warranty, paint protection, servicing packages and maintenance agreements. If you’re having the car delivered from a dealership, you may be charged a delivery fee. Also, whilst it’s not common practice, there may be a transaction or admin fee added to the cost of the car.

Frequently asked questions