Bureau of Wealth

Car Finance Calculator

By the Bureau of Wealth team Updated

This calculator is general information, not financial advice. Check your own figures with the provider or a qualified adviser before acting on them.

Enter the car price, your deposit, any part-exchange, fees, APR and term to see how much you borrow, your monthly repayment and what the car costs you in total.

Check the highlighted fields to see your results.

What this calculator assumes

  • The finance is a fixed-rate personal loan or a hire purchase agreement repaid in equal monthly instalments until the balance is cleared.
  • It does not model Personal Contract Purchase (PCP), where monthly payments are lower because a large optional balloon payment is left at the end.
  • There is no sales tax field because car prices shown to UK consumers already include VAT.
  • Fees you enter, such as an arrangement fee or a hire purchase option to purchase fee, are added to the amount borrowed and charged interest.
  • Your part-exchange is worth the value you enter and has no finance left on it. If it does, take the settlement figure off its value first.
  • Insurance, road tax, servicing and depreciation are not included.

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How the amount borrowed is worked out

The calculator takes the car price, subtracts your deposit and part-exchange value, and adds any fees that will be added to the finance. What is left is the amount you borrow. It then uses the standard repayment formula for a fixed-rate loan, with the APR divided by 12 and the number of months in the term, to find the equal monthly repayment that clears the balance by the final month.

Total cost of the car adds your deposit, your part-exchange value and every monthly repayment. The difference between that figure and the price is what the finance costs you.

A worked example

Say you are buying a £20,000 car with a £2,000 deposit and a part-exchange worth £3,000, so you borrow £15,000. At 7.9% APR over 48 months the repayment is £365.49 a month. You pay £2,543.53 in interest, and the car costs £22,543.53 in total.

Over 36 months instead, the repayment rises to £469.35 but interest falls to £1,896.74, saving about £650. You can check the 48-month figure in a spreadsheet with =PMT(7.9%/12, 48, -15000), which returns 365.49.

Hire purchase, PCP and personal loans

With hire purchase, MoneyHelper explains, you pay a deposit and then monthly payments based on the value of the car after the deposit, plus interest. The finance company owns the car until the end of the contract, and you become the owner once you make the final payment, including an option to purchase fee that is usually about £100. Because the payments are equal, this calculator models hire purchase well.

PCP is different. Your monthly payments cover the car's value minus the deposit and a large balloon payment, plus interest, and at the end you choose whether to pay the balloon and keep the car. Using this calculator for a PCP quote would overstate the monthly payment and understate the final bill. A personal loan from a bank means you own the car straight away, and it works exactly as the calculator shows.

Before you sign

Compare finance offers by APR and total amount payable, not only the monthly figure. Check whether any fees are added to the finance, and read how much you would need to pay to settle the agreement early. If the numbers look tight, a larger deposit or a cheaper car usually makes more difference than a longer term.

If you are weighing a bank loan against dealer finance, the loan repayment calculator shows how overpayments on a personal loan would cut the interest and clear it sooner.

Frequently asked questions

Can I use this for a PCP deal?

No. PCP leaves a large optional balloon payment at the end, so the monthly payments are lower than an equal-payment loan for the same car. Use the figures in your PCP quote, and ask the dealer for the total amount payable including the balloon.

Why is there no VAT field?

Prices shown to UK consumers must include VAT, so the car price you see already has it. Enter that price as it is.

Who owns the car on hire purchase?

The finance company owns it until you have made every payment, including the option to purchase fee. Because the agreement is secured on the car, the company can take it back if you do not keep up the payments.

How much deposit do I need?

MoneyHelper says hire purchase deals usually need a deposit of around 10% of the car's value. A higher deposit reduces the amount you borrow, your monthly repayment and the interest you pay.

What if I still owe finance on my part-exchange?

Ask your current lender for a settlement figure and take it off the part-exchange value before entering it. If you owe more than the car is worth, you will need to cover the difference, which increases the amount you borrow.

Sources

Figures come from institutions millions of people rely on. How we keep calculators accurate.