| Period | Payment | Principal | Interest | Balance |
|---|
A common US rule: put 20% down, finance for no more than 4 years, and keep total car costs under about 10% of gross income. Strict — but it keeps you out of long underwater loans.
If you swap cars every three years, a 72–84 month loan almost guarantees negative equity at trade-in. Match the term to how long you will actually drive it.
UK PCP monthly looks cheap because a large optional final payment sits at the end. You still pay interest on the amortising slice — and the balloon is due if you want to keep the car.
Same fixed-rate amortisation as a mortgage. P is the amount financed after deposit, tax, fees and trade-in; on PCP, the balloon is left off that slice.
Pick a region first (US loan vs UK hire purchase / PCP), then set price, deposit, APR, and term. Open Fees & extras for trade-in payoff and arrangement fees. Compare term cards for the interest trade-off; expand the schedule for year-by-year totals. On PCP, treat the balloon as money you still owe at the end — not a discount.
US: a $32,000 car with 10% down and 7% sales tax finances about $31,040. At 6.5% APR over 60 months, the payment is about $607/mo.
UK PCP: a £22,000 car with 10% deposit and a 40% balloon amortises roughly £11,000 — so the monthly looks far lower than hire purchase, but the optional final payment is still due if you keep the car.
Standard fixed-rate amortisation on the amount financed: monthly rate r = APR/12, term n months. Interest is charged on the remaining balance, so early payments are mostly interest.
Hire purchase finances the whole amount after deposit — you own the car when the term ends. PCP leaves a balloon (GFV) unpaid during the term so monthly payments are lower; at the end you pay it, refinance, or return the car under the contract.
Often yes — many dealers roll state/local sales tax into the amount financed. This tool adds tax on the vehicle price by default for the US region; set the tax % to zero if you pay it up front.
Leases use residual value and money-factor pricing, not the same amortisation as a loan. This page covers purchase finance (loan / HP / PCP), not closed-end leases.
Credit-score pricing, dealer mark-ups, insurance, fuel, maintenance, early settlement fees, PCP mileage excess, GAP insurance, and tax treatment. Your lender's illustration is the figure that matters.
No. It is a reference calculator. Real offers depend on credit, dealer, fees, insurance, and (for PCP) contract mileage. Verify with your lender before you sign.