PCP vs HP vs loan calculator
- Compare all three side by side for the same car
- See monthly payment and total cost for each
- Find the cheapest way to finance your car
- Adjust each APR to match your own quotes
- No sign-up required
Compare PCP, HP and a personal loan
Enter the car price, deposit and term, then set the APR for each. The balloon only applies to PCP. The result shows all three side by side, with the lowest total cost highlighted.
Figures are illustrative only and not financial advice, and this comparison isn't a recommendation of any particular finance type or lender. Your actual APR depends on the lender and your credit profile. Change each APR to match the quotes you've been given. For your rights and how car finance is regulated, see the FCA guide to car finance.
Sources
- FCA car finance, hire purchase and PCP fca.org.uk
- MoneyHelper buying and running a car moneyhelper.org.uk
- Bank of England base rate bankofengland.co.uk
PCP vs HP vs personal loan: which is cheapest?
These are the three main ways to spread the cost of a car in the UK. They all get you the same car, but they cost different amounts and leave you in very different positions at the end. The right one depends on whether you care most about the monthly payment, the total cost, or owning the car outright.
Here's how they stack up on a £25,000 car with a £2,500 deposit over 48 months, using typical 2026 rates:
| PCP | HP | Personal loan | |
|---|---|---|---|
| Monthly payment | ≈ £326 | ≈ £548 | ≈ £534 |
| Typical APR | 7.9% | 7.9% | 6.5% |
| Total cost | ≈ £30,646 | ≈ £28,815 | ≈ £28,112 |
| Balloon at end | ≈ £12,500 | None | None |
| Own the car? | Only if balloon paid | Yes, at the end | Yes, from day one |
| Mileage limit | Yes | No | No |
| Can hand it back? | Yes | After 50% paid | No |
The pattern is clear. PCP wins on the monthly payment by a wide margin, £326 against roughly £548 for HP. But if you pay the balloon and keep the car, PCP costs the most in total, because you're paying interest on that £12,500 balloon for the whole four years. The personal loan is cheapest overall here, mostly because loan rates tend to be a point or two below dealer finance.
When PCP makes sense
PCP suits you if you like changing your car every three or four years and want the lowest monthly cost. You're effectively renting the depreciation rather than buying the whole car. The flexibility at the end is genuinely useful: hand it back, pay the balloon, or roll any equity into the next deal. Just watch the mileage limit, because excess charges add up. Our PCP calculator works out the full picture including the balloon.
When HP makes sense
HP is the better pick if you want to own the car and keep it well beyond the finance term. Payments are higher because you're clearing the whole balance, but once you've made the last one the car is yours with nothing left to settle. No balloon, no mileage limit. The HP calculator shows what you'd pay each month and in total.
When a personal loan makes sense
A personal loan is worth a look if you can get a rate below the dealer's offer and you want to own the car from day one. Because you own it outright, you can sell it whenever you like and there are no mileage restrictions. The catches: you need a reasonable credit score for the best rates, and you don't get the right to hand the car back that HP and PCP give you. If the car is written off or you want out early, you still owe the full loan.
Don't forget depreciation
Whichever finance you choose, the biggest real cost is usually the value the car loses while you own it. A £25,000 car can shed more than half its value in three years. On PCP the lender absorbs some of that risk through the balloon, which is part of why PCP payments look low. With HP or a loan, that loss is yours. Run the numbers with the car depreciation calculator before you decide.