PCP Calculator UK

Calculate your Personal Contract Purchase car finance payments with our free UK calculator

Calculate Your PCP Payments

How PCP Car Finance Works

Personal Contract Purchase (PCP) is one of the most popular car finance options in the UK. It offers lower monthly payments compared to traditional hire purchase by deferring a large portion of the car’s value to the end of the contract.

Key Features of PCP

  • Lower monthly payments: You only pay for the depreciation during your contract
  • Flexible end options: Return, buy, or part-exchange at contract end
  • Fixed future value: The balloon payment is agreed upfront
  • Mileage restrictions: Annual mileage limits help maintain the car’s value
Tip: PCP works best if you like changing cars regularly and don’t want to worry about depreciation or selling your current vehicle.

PCP vs Other Finance Options

Finance Type Monthly Payments Ownership Flexibility
PCP Lower Optional at end High – 3 end options
Hire Purchase Higher Automatic at end Low – must complete
Personal Loan Fixed Immediate High – your car to sell
Leasing Lower Never Low – must return

Frequently Asked Questions

What happens if I exceed my mileage allowance?

You’ll typically pay between 5p-25p per excess mile when you return the car. The exact rate depends on your agreement and the vehicle type.

Can I terminate my PCP agreement early?

Yes, you have the right to voluntary termination once you’ve paid 50% of the total finance amount. However, you may face early settlement charges.

What condition must the car be in when I return it?

The car should be in good condition with only fair wear and tear. Any damage beyond normal wear may result in additional charges.

Can I modify a car on PCP?

Generally no, as you don’t own the car. Any modifications must be reversible and approved by the finance company beforehand.

Is the balloon payment guaranteed?

Yes, the Guaranteed Minimum Future Value (GMFV) is fixed at the start of your contract and won’t change regardless of market conditions.

Before You Apply

Consider Your Circumstances

  • Annual mileage: Be realistic about your driving needs
  • Budget: Factor in insurance, maintenance, and potential end-of-contract charges
  • Future plans: Consider whether you’ll want to keep the car or change it
  • Credit score: Check your credit rating as this affects your APR
Important: This calculator provides estimates only. Actual rates and payments may vary based on your credit score, chosen vehicle, and lender criteria. Always obtain official quotes from authorised dealers or finance providers.

References

  • Financial Conduct Authority. (2024). Motor Finance: Guidance for Firms. London: FCA Publications.
  • Competition and Markets Authority. (2023). Motor Finance Market Study. London: CMA.
  • Society of Motor Manufacturers and Traders. (2024). UK Car Finance Statistics. London: SMMT.
  • Association of British Insurers. (2024). Motor Insurance Premium Tracker. London: ABI.
  • Bank of England. (2024). Bank Rate and Interest Rate Data. London: BoE Statistical Publications.
  • HM Treasury. (2024). Consumer Credit Act 1974: Current Regulations. London: HMSO.

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