Car Finance Calculator

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MOTORS Car Finance Calculator

We've partnered with CarMoney to search a panel of finance providers to offer you the most suitable car loan for your needs.

What is the difference between PCP and HP finance?

PCP (Personal Contract Purchase)

  • Receive Guaranteed Future Value (GFV)
  • Upfront deposit
  • Lower monthly payments
  • Only pay the depreciation value
  • Deposit on your next car

HP (Hire Purchase)

  • Upfront deposit
  • Monthly payments
  • No excess mileage charges
  • Achieve complete ownership
  • New car every three years

Car Finance explained

Car finance gives you the opportunity to drive a car that you otherwise would have been unable to afford to buy outright. This means you can access newer, more expensive, vehicles than you had previously budgeted for and there are a range of policies you can choose from to make this a reality.

Like a mobile phone contract, or a mortgage, a car finance policy relies on you to make monthly payments towards the value of your purchase. This means you will not own the car outright until you complete these instalments, but many policies allow you replace it with a newer model after a certain period - similar to a mobile phone upgrade.

Two of the most popular car finance policies available are PCP (Personal Contract Purchase) and HP (Hire Purchase). Both of these policies have clear benefits and will suit different drivers, depending on what they can afford and choice of car.

What is PCP (Personal Contract Purchase) Finance?

A PCP policy requires an upfront deposit on the chosen car and an agreement to make monthly instalments to pay off the depreciation value of the car. This depreciation value is determined at the start of the policy through a GFV (Guaranteed Future Value) and the driver will need to agree to an annual mileage estimate. At the end of the policy, the driver will need to pay a final balloon payment to own the car outright, or hand the car back to the finance company.

What is HP (Hire Purchase) Finance?

In comparison, an HP policy still requires an upfront deposit and monthly payments, but instead of paying off the depreciation value, the policy holder pays off the entire value of the car. This means the driver will one day own the car outright once the payments are complete - usually in a two to three -year period. The driver can also use the car as much as they want, without needing to agree a mileage estimate with the finance company. An HP policy must be settled before the driver can sell the car.

Check out our Finance Calculator at the top of this page to find the right deal for you. If you can afford the monthly payments, then car financing is a great way of gaining access to a car you have always wanted.