Free tool · PCP

PCP calculator

Estimate the monthly payment, the balloon (GMFV), and the total cost of a Personal Contract Purchase deal — separately for the “keep the car” and “hand it back” endings, with a depreciation-modelled equity chart.

PCP deal

Your deal

Balloon (GMFV)

End-of-term balance

Auto-calculate balloon?

Auto-GMFV uses the depreciation model below to estimate the car’s value at month 36: about £14,736.

Depreciation context

The car

Purchase type
New cars take the biggest hit in year 1 (VAT + dealer margin). Used cars take a smaller hit, sized by the retail markup of where you bought it. Subsequent years use the depreciation mode below.
Depreciation mode
Estimate only — real resale varies by make, model, condition, and market demand.

PCP cost summary

Monthly payment

£324.30

Balloon

£14,736

Total interest

£4,411

Amount financed

£22,000

Est. value at term end

£14,736

Term

3 years

What you actually pay

At the end of the PCP term you choose: pay the balloon and keep the car, or hand it back and walk away (subject to mileage and condition).

If you hand the car back

£14,675

Deposit + fees + 36 monthly payments. No balloon.

If you keep the car

£29,411

Above plus the balloon payment to take ownership.

Estimated equity: £0 — estimated end value £14,736 vs balloon £14,736. If the estimate holds, keeping the car would leave you with equity.

Loan balance vs estimated car value

The loan balance ends at the balloon, not zero. The dashed horizontal line marks the balloon level so you can see whether the car’s estimated value crosses below it.

£0£6,250£12,500£18,750£25,000m0m12m24m36Balloon £14,736
  • Loan balance
  • Estimated car value
  • Balloon (GMFV)

Payment schedule

Month by month — payment, interest charged, capital repaid, balance (ending at the balloon), and the depreciation-modelled car value. Estimated depreciation over the term: 41.1%.

MonthPaymentInterestCapitalBalanceCar valueEquity
1£324.30£144.83£179.46£21,821£21,250−£571
2£324.30£143.65£180.64£21,640£21,057−£583
3£324.30£142.46£181.83£21,458£20,864−£594
4£324.30£141.27£183.03£21,275£20,670−£605
5£324.30£140.06£184.24£21,091£20,477−£614
6£324.30£138.85£185.45£20,905£20,284−£621
7£324.30£137.63£186.67£20,719£20,091−£628
8£324.30£136.40£187.90£20,531£19,898−£633
9£324.30£135.16£189.14£20,342£19,705−£637
10£324.30£133.92£190.38£20,151£19,511−£640
11£324.30£132.66£191.63£19,960£19,318−£641
12£324.30£131.40£192.90£19,767£19,125−£642
13£324.30£130.13£194.17£19,573£18,926−£646
14£324.30£128.85£195.44£19,377£18,727−£650
15£324.30£127.57£196.73£19,180£18,528−£652
16£324.30£126.27£198.03£18,982£18,329−£653
17£324.30£124.97£199.33£18,783£18,131−£653
18£324.30£123.65£200.64£18,582£17,932−£651
19£324.30£122.33£201.96£18,380£17,733−£648
20£324.30£121.00£203.29£18,177£17,534−£643
21£324.30£119.67£204.63£17,973£17,335−£638
22£324.30£118.32£205.98£17,767£17,136−£631
23£324.30£116.96£207.33£17,559£16,937−£622
24£324.30£115.60£208.70£17,350£16,738−£612
25£324.30£114.22£210.07£17,140£16,571−£569
26£324.30£112.84£211.46£16,929£16,405−£524
27£324.30£111.45£212.85£16,716£16,238−£478
28£324.30£110.05£214.25£16,502£16,071−£431
29£324.30£108.64£215.66£16,286£15,904−£382
30£324.30£107.22£217.08£16,069£15,737−£332
31£324.30£105.79£218.51£15,851£15,570−£280
32£324.30£104.35£219.95£15,631£15,404−£227
33£324.30£102.90£221.39£15,409£15,237−£172
34£324.30£101.44£222.85£15,186£15,070−£116
35£324.30£99.98£224.32£14,962£14,903−£59
36£324.30£98.50£225.80£14,736£14,736+£0

What is PCP?

Personal Contract Purchase (PCP) is a UK car finance product where you pay a deposit, then fixed monthly payments over a term (usually 24-48 months), then choose what to do at the end: pay the balloon (GMFV) and keep the car, hand the car back, or roll any equity into the next deal.

PCP’s appeal is the lower monthly payment compared to HP. The monthly only needs to cover the car’s expected depreciation during your contract, not its full value. That makes premium and new cars feel more affordable month to month — but the total cost over time, especially if you roll into a new PCP every few years, can be much higher than buying outright.

How PCP works

The structure has four moving parts:

  1. 1. Deposit — upfront, reduces the amount financed.
  2. 2. Amount financed = Car price − Deposit.
  3. 3. GMFV / balloon— the lender’s guaranteed end-of-term value. Set at contract start.
  4. 4. Monthly payment — amortizes the loan from its starting balance down to the balloon over the term, with interest accruing on the full balance each month.

At the end of the term:

  • · Pay the balloon and take ownership.
  • · Hand the car back (subject to mileage and condition) and walk away with nothing owed.
  • · Use equity (if the car is worth more than the balloon) as deposit on a new PCP.

PCP vs HP: monthly cost vs total cost

The classic trade-off: PCP gives you a lower monthly payment but you don’t own the car at the end without paying the balloon; HP costs more per month but you own the car outright at the end of the term.

On the same car at the same term, PCP monthlies are typically 30-40% lower than HP monthlies. But the total amount paid (if you pay the balloon at the end) usually ends up close to the HP total, and is much higher than HP if you roll the equity into a new PCP every cycle.

PCP fits buyers who want a new car every 2-4 years and treat the balloon as a hand-back point, not a purchase point. HP fits buyers who want to own the car for many years.

Why the balloon (GMFV) matters

The GMFV is the lender’s guarantee. If the actual market value of your car at the end of the contract is below the balloon, you hand the car back and the lender absorbs the loss — that guarantee is the structural reason PCP exists.

A higher GMFV means lower monthly payments (you’re financing less of the car) but a larger end-of-term balloon if you want to keep the car. A lower GMFV means higher monthlies but a smaller balloon. Lenders set GMFV based on the car’s expected residual value at your chosen term and mileage — premium cars retain more value, so they get higher GMFVs and feel cheaper on PCP than budget cars at the same price.

Mileage limits and condition charges

PCP contracts include an agreed annual mileage limit (usually 8,000-15,000 miles/year). Exceeding the limit triggers end-of-contract excess mileage charges, typically 5-15p per mile over.

The car must also be in “fair wear and tear” condition when handed back — within the BVRLA fair wear and tear guide. Cars with damage outside the guide trigger condition charges. Both excess mileage and condition charges only apply if you hand the car back; they don’t apply if you pay the balloon and take ownership.

When using this calculator, set the annual mileage to match your actual driving — the depreciation model uses higher mileage to reduce estimated end-of-term value, which is what would happen in reality too.

How to use this calculator

  • Enter your deal. Car price, deposit, fees, term and APR.
  • Choose auto or manual GMFV.Auto uses the depreciation model — useful if you don’t have a balloon quote yet. Manual lets you enter the balloon a dealer has actually quoted.
  • Set the depreciation context.Vehicle age, annual mileage and depreciation mode. The model uses these to estimate the car’s value at every point in the term.
  • Compare keep vs hand back. The two-line total shows what you actually pay in each scenario. The end-of-term equity callout tells you which choice is likely better given the depreciation estimate.
  • Watch the equity chart.When the car-value (dashed) line sits above the loan-balance (solid) line, you have equity. When it’s below, you’re relying on the GMFV guarantee.

PCP FAQ

What is PCP (Personal Contract Purchase)?+

PCP is a UK car finance product where you pay a deposit, then fixed monthly payments over a 24-48 month term, then at the end choose one of three options: pay the balloon (GMFV) to keep the car, hand the car back and walk away, or use any equity above the balloon as a deposit on a new PCP. Monthly payments are lower than HP because they only cover the depreciation expected during the contract, not the car's full value.

What is GMFV / balloon payment on a PCP?+

GMFV stands for Guaranteed Minimum Future Value — the lender's estimate of what the car will be worth at the end of the contract. It's the balloon payment you'd pay to keep the car. Because GMFV is guaranteed, the lender takes the depreciation risk: if the car is worth less than the balloon at the end, you simply hand it back. If it's worth more, you have equity to use against your next deal.

How is the monthly PCP payment calculated?+

The lender amortizes (car price − deposit − balloon) over the term at the interest rate, but interest accrues on the full outstanding balance every month, not just the amortizing portion. So PCP monthlies are higher than a naive '(loan − balloon) / term' calculation would suggest. For a £25,000 car with £3,000 deposit, £12,000 balloon, 36-month term at 7.9% APR, the monthly works out to around £329.

Should I hand the car back or pay the balloon?+

Compare the car's actual market value at the end to the balloon. If market value > balloon, paying the balloon and selling the car would leave you with equity — you might as well keep it (or settle and sell). If market value < balloon, hand it back; the GMFV guarantee means the lender takes the loss. Mileage and condition charges apply when handing back, so check the small print before assuming hand-back is free.

What happens if I exceed the mileage limit on PCP?+

Excess mileage charges typically run 5-15p per mile over the agreed limit and are billed at the end of the contract if you hand the car back. If you keep the car and pay the balloon, excess mileage doesn't apply because you own the vehicle outright. Negotiate a realistic mileage limit upfront — the lender will adjust the GMFV (and therefore your monthly payment) based on it.

Is PCP cheaper than HP?+

Monthly: yes, PCP is almost always cheaper because you're not paying down the full car value during the term. Total: it depends on what you do at the end. If you keep paying balloon after balloon to roll into a new PCP every few years, you pay more total cost over decades than buying outright on HP and keeping each car longer. PCP is best when you genuinely want a new car every 2-4 years; HP is best when you want to own the car for many years.

Can I settle a PCP agreement early?+

Yes, under the Consumer Credit Act 1974. Request a settlement figure from the lender — they're required to provide one within 12 working days. The settlement includes the remaining capital plus any unrebated interest charges. Settlement is usually expensive in the first half of the contract because most of your early payments are interest, but it allows you to sell the car (with the proceeds going to settle the finance first) before the term ends.

What's voluntary termination on a PCP?+

Voluntary termination is a statutory right under the Consumer Credit Act 1974. Once you've paid at least 50% of the total amount payable (including the balloon), you can hand the car back and walk away with no further liability, provided the car is in reasonable condition and within agreed mileage. The 50% threshold is the trap — most PCP contracts hit 50% somewhere in the second half of the term, not the middle, because of how the balloon front-loads cost.

This calculator is for illustrative purposes only and does not constitute financial advice. PCP quotes depend on the lender’s underwriting, your credit profile, the specific vehicle, agreed mileage, and fees not modelled here. End-of-term excess mileage and condition charges can add significantly to total cost. Always read the agreement carefully before signing.