Is this a credit broker quote?

No. MotorTools is not offering credit. Use this to understand the shape of HP vs PCP, then get regulated illustrations from lenders or brokers.

What is a balloon / GFV?

On PCP, the Guaranteed Future Value is the optional final payment if you keep the car. Handing the car back usually means you never pay it — subject to mileage, damage and finance T&Cs.

Why does PCP still charge interest on the balloon?

Because the lender is still financing that residual amount during the agreement. Your monthly payment covers amortisation of the “gap” plus interest on the balloon.

Should I include fees?

Add arrangement fees into the price or deposit fields approximately, or ask the broker for total amount payable — fees change the real APR.

Free UK calculator

Car finance calculator

Compare Hire Purchase (HP) and Personal Contract Purchase (PCP) side by side — monthly payment, balloon/GFV, total interest and what you actually pay over the term. Planning maths only, not a regulated credit offer.

Car price (£)Deposit (£)APR (%)Term (months)PCP balloon / GFV (£) — set 0 for pure HP

HP (balloon £0)

£569.58 /mo

Total interest: £4,839.75
Total paid: £29,839.75
Amount financed: £22,500.00

PCP (with balloon)

£398.93 /mo

Balloon at end: £10,000.00
Total interest: £6,648.75
Total if you keep car: £31,648.75

Monthly saving on PCP vs HP: £170.65 — but keeping the car can cost £1,809.00 more overall.

How HP and PCP differ

HP typically finances the whole car (minus deposit) with no large final payment — you own it when the last instalment clears. Monthly payments are usually higher than PCP for the same term.

PCP finances the gap between deposit and a Guaranteed Future Value (balloon). You pay interest on that balloon each month even though you only pay the balloon if you keep the car. Lower monthly cost; bigger decision at the end.

APR is the interest rate used here in a simplified monthly model. Real broker quotes include fees, commissions and underwriting — always compare the total amount payable on the official illustration.

Worked examples

£25,000 car, £2,500 deposit, 9.9% APR, 48 months, £10,000 balloon

PCP monthly is usually hundreds lower than HP, but the balloon is still owed (or you hand the car back within mileage/condition limits). Compare total paid if you keep the car.

Same deal with balloon set to £0

That is effectively an HP-style amortising loan on the full financed amount — useful for “what if I just want to own it?”

Shorter term vs longer term

Dropping from 60 to 36 months raises the monthly but often cuts total interest sharply. Run both before signing.

Frequently asked questions

Is this a credit broker quote?: No. MotorTools is not offering credit. Use this to understand the shape of HP vs PCP, then get regulated illustrations from lenders or brokers.
What is a balloon / GFV?: On PCP, the Guaranteed Future Value is the optional final payment if you keep the car. Handing the car back usually means you never pay it — subject to mileage, damage and finance T&Cs.
Why does PCP still charge interest on the balloon?: Because the lender is still financing that residual amount during the agreement. Your monthly payment covers amortisation of the “gap” plus interest on the balloon.
Should I include fees?: Add arrangement fees into the price or deposit fields approximately, or ask the broker for total amount payable — fees change the real APR.

Related tools and guides

Illustrative finance maths only. Not a credit agreement, broker service or regulated advice. Confirm APR, fees, mileage limits and total amount payable on an official quotation.