The true cost
PCP Calculator: Monthly Payments & the Balloon
Work out your PCP monthly payment, the balloon (GMFV) and the total 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
Monthly = (amount financed − balloon × discount factor) × monthly rate ÷ (1 − discount factor), where the discount factor is (1 + monthly rate)^−term. Total to own = deposit + payments + balloon.
The balloon is the Guaranteed Minimum Future Value (GMFV) — you only pay it if you keep the car.
Full method: how we calculate.
PCP (Personal Contract Purchase) is car finance where your monthly payments cover the car's expected drop in value, with an optional final 'balloon' payment if you want to keep it. This calculator shows the monthly payment and the total amount payable, including the balloon.
What is PCP car finance?
PCP is a type of car finance where you pay for the car's depreciation, not its full price. At the end you choose to pay the balloon and keep it, hand it back, or part-exchange.
Because you're only financing the drop in value, the monthly payment is lower than HP for the same car. The trade-off is that you don't own it unless you pay the balloon.
How does PCP work?
PCP runs in three stages: a deposit, fixed monthly payments, then a choice at the end.
- Put down a deposit (often 10% — a £2,000 deposit on a £20,000 car).
- Pay fixed monthly payments for the term, typically 24 to 48 months.
- At the end, pay the balloon to own the car, hand it back and walk away, or part-exchange any equity into a new deal.
What is a balloon payment (GMFV)?
The balloon, or Guaranteed Minimum Future Value, is the lump sum you pay at the end of a PCP only if you choose to keep the car. The lender sets it at the start based on the car's predicted value.
Worked example
What happens at the end of a PCP?
You have three choices at the end of a PCP.
- Keep it: pay the balloon (often via a new loan) and the car is yours.
- Hand it back: return the car and walk away, as long as it's within the mileage and condition terms.
- Part-exchange: put any equity above the balloon towards your next car — see selling on finance.
PCP vs HP: which is cheaper?
HP is usually cheaper overall; PCP keeps the monthly lower. The balloon is what makes the difference.
See the full breakdown in PCP vs HP vs leasing, or compare with HP directly.
| PCP | HP | |
|---|---|---|
| Monthly | ≈ £314 | ≈ £452 |
| Total to own | ≈ £25,086 | ≈ £23,695 |
| Own it? | Only if you pay the balloon | Yes, at the end |
Thinking of ending a PCP early?
You can end a PCP early by settling it or, once you've paid 50% of the total, by voluntary termination.
Settling means paying the outstanding balance now — work it out with the settlement calculator. Or, under the Consumer Credit Act 1974, you can hand the car back through voluntary termination once you've paid half the total amount payable. Watch out for negative equity if the car is worth less than you owe.
Were you mis-sold a PCP?
Some PCP deals taken out between 2007–2024 carried hidden commission that pushed up your interest rate. If yours did, you may be owed redress.
The FCA is running a redress scheme following the Supreme Court ruling of 1 August 2025. You can estimate your position with the compensation estimator — it's an estimate, not a promise, and you can claim free yourself.
Frequently asked
What is PCP car finance?
What is a balloon payment (GMFV)?
Do you own the car at the end of a PCP?
Is PCP cheaper than HP?
Can you end a PCP early?
Work out your next step
Independent calculators — pick the one that fits your situation.