The true cost
Balloon Payment Calculator (GMFV)
Work out the balloon payment (GMFV) on a PCP and how it changes your monthly and the cost to own the car.
Monthly payment
£314.30
Total amount payable
£25,087
if you keep the car
PCP result
- Amount financed
- £18,000
- Deposit
- £2,000
- Balloon (GMFV)
- £8,000
- Total interest
- £5,087
Your monthly payment is only half the story — the total is what you actually hand over. Figures are estimates; your real quote depends on the lender and your credit.
How we work this out
On PCP the balloon (GMFV) is deferred to the end. Monthly = (amount financed − balloon × (1 + monthly rate)^−term) × monthly rate ÷ (1 − (1 + monthly rate)^−term). Total to own = deposit + payments + balloon. Total interest = total payable − price.
The balloon is the Guaranteed Minimum Future Value (GMFV). You only pay it if you keep the car.
Full method: how we calculate.
A balloon payment is the large optional sum at the end of a PCP that you pay only if you want to keep the car. This calculator shows how the balloon size changes your monthly payment and the total amount payable to own the car.
A bigger balloon means a lower monthly — but a higher total to own, because you finance that balloon for the whole term. Set the price, deposit, term, APR and balloon above and see both.
What is a balloon payment (GMFV)?
A balloon payment, or Guaranteed Minimum Future Value, is the lump sum at the end of a PCP that you pay only if you choose to keep the car. The lender sets it at the start from the car's predicted future value.
Because the balloon is parked at the end, your monthly payments only cover the car's expected drop in value plus interest — which is why PCP costs less per month than HP. The trade-off is that the balloon is financed for the whole term, so you pay interest on it throughout.
How the balloon changes your monthly payment
A bigger balloon lowers your monthly payment, because less of the car's cost is spread across the term. On a £20,000 car with £2,000 down over 48 months at 9.9% APR, an £8,000 balloon drops the monthly to about £314.
Worked example
Bigger balloon, lower monthly, higher total to own
The balloon is a trade: a bigger balloon cuts the monthly but raises the total amount payable to own the car. Compare the monthly against the total before you pick a deal.
If you plan to keep the car, a smaller balloon costs less overall. If you plan to hand it back or part-exchange, a bigger balloon and the lower monthly may suit you better. See the full picture in PCP vs HP.
| Balloon | Monthly | Total to own | Interest |
|---|---|---|---|
| £0 (HP) | ≈ £452 | ≈ £23,697 | ≈ £3,697 |
| £6,000 | ≈ £349 | ≈ £24,739 | ≈ £4,739 |
| £8,000 | ≈ £314 | ≈ £25,087 | ≈ £5,087 |
| £10,000 | ≈ £280 | ≈ £25,434 | ≈ £5,434 |
What happens to the balloon at the end of a PCP?
At the end of a PCP you decide what to do about the balloon — pay it, walk away, or part-exchange. You are never forced to pay it.
- Pay the balloon (often with a new loan) and the car is yours.
- Hand the car back and owe nothing more, as long as you are within the mileage and condition terms.
- Part-exchange: if the car is worth more than the balloon, put that equity towards your next car — work it out with the part-exchange calculator.
Watch out for negative equity at the balloon
If the car is worth less than the balloon at the end, you are in negative equity and have nothing to roll into a new deal. Handing the car back is usually the safe option here.
Check where you stand with the negative equity calculator before the agreement ends. If you want out early, you can settle the finance or, once you have paid half the total, use voluntary termination.
Was your PCP mis-sold?
Some PCP deals from 2007–2024 carried hidden commission that pushed up your interest rate — which also inflated what you paid on the balloon. If yours did, you may be owed redress.
The FCA's redress scheme follows the Supreme Court ruling of 1 August 2025. Estimate your position with the compensation estimator — an estimate, not a promise, and free to claim yourself.
Frequently asked
What is a balloon payment on car finance?
How does the balloon change my monthly payment?
Do I have to pay the balloon payment?
Does a bigger balloon cost more overall?
What if the car is worth less than the balloon?
Work out your next step
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