HP car finance calculator

  • Work out your monthly hire purchase payment
  • See total cost and total interest
  • No balloon, you own the car at the end
  • Model deposit, APR and term changes
  • No sign-up required

Updated August 2026 · FCA car finance guidance

New car in dealership showroom

HP car finance calculator

Enter the car price, your deposit, the APR and the term to see your monthly hire purchase payment and the total you'll pay. HP clears the whole balance, so there's no balloon at the end.

£
£
%
mo
Monthly payment
£548
Across 48 months. The car is yours once the final payment clears.
Monthly payment
£548
Total cost
£28,815
Total interest
£3,815
Amount financed
£22,500
Car price£25,000
Less deposit−£2,500
Amount financed£22,500
Monthly payment × term£26,315
Total amount payable£28,815
This uses the standard amortising method that FCA-regulated lenders apply to hire purchase: the whole balance reduces to zero over the term, so there's no balloon left at the end. Your real quote depends on the lender, any fees and your credit profile. Some HP agreements add a small option-to-purchase fee at the end, not shown here.

Figures are illustrative only and not financial advice. Your actual APR depends on the lender and your circumstances. For your rights and how car finance is regulated, see the FCA guide to car finance.

Sources

How HP car finance works

Hire purchase, or HP, is the simplest form of car finance. You pay a deposit, then fixed monthly payments that clear the full balance over the term. When the last payment goes through, the car is yours. No balloon, no mileage limits, no handing it back. It's the closest thing to buying with a loan, except the finance company holds the car as security until you've paid it off.

Because the monthly payments cover the whole cost of the car, they're higher than PCP. But you're not paying interest on a big lump sum that sits untouched until the end, so the total interest can work out lower if you keep the car. HP suits people who want to own the car outright and plan to hold onto it beyond the finance term.

A worked example on a £25,000 car

Here's a typical HP deal on a £25,000 car with a 10% deposit at 7.9% APR over 48 months:

ElementAmount
Car price£25,000
Deposit (10%)£2,500
Amount financed£22,500
APR7.9%
Term48 months
Monthly payment≈ £548
Total interest≈ £3,815
Total paid≈ £28,815

So you'd pay around £548 a month for four years, and at the end you own a car with nothing left to settle. Total cost is about £28,815, of which £3,815 is interest. Change any input above and the figures update straight away.

HP vs PCP on the same car

This is where the two really differ. Take that same £25,000 car at 7.9% over 48 months. On HP you'd pay roughly £548 a month and own it outright. On PCP with a £12,500 balloon, the monthly payment drops to about £326, but you'd still owe £12,500 at the end to keep the car. So PCP looks cheaper month to month, but you either pay that lump sum, hand the car back, or trade in.

FactorHPPCP
Monthly paymentHigher (≈ £548)Lower (≈ £326)
Balloon at the endNoneYes (≈ £12,500)
Own the car?Yes, automaticallyOnly if you pay the balloon
Mileage limitNoYes
Best forKeeping the car long termLower payments, changing every few years

For a full side-by-side including personal loans, see our PCP vs HP vs loan comparison.

Your right to hand the car back

HP comes with a useful protection under the Consumer Credit Act called voluntary termination. Once you've paid at least half the total amount payable, you can hand the car back and walk away with nothing more to owe, as long as it's in fair condition. If you haven't yet reached the halfway point, you can still terminate but you'll need to top up to the 50% mark first.

This is worth knowing if your circumstances change. It's a genuine exit route that a personal loan doesn't give you, because with a loan you own the car and the debt separately.

Settling early and missed payments

You can ask for a settlement figure and pay off HP early at any point, usually with an interest rebate for the time saved. There may be a small early settlement fee. On the flip side, because the car is security, missed payments are serious: if you've paid less than a third of the total the lender can repossess without a court order, and once you've paid a third or more they need a court order. If money gets tight, speak to the lender early. The MoneyHelper guide on running a car is a good neutral place to start.

Common questions

HP stands for Hire Purchase. You pay a deposit, then fixed monthly payments that clear the whole balance over the term, usually 24 to 60 months. There's no balloon payment. Once you make the final payment the car is yours. The car acts as security for the loan, so you don't technically own it until the last payment clears.
HP is usually cheaper in total if you intend to keep the car, because you pay the balance down in full and don't carry interest on a large balloon for the whole term. The trade-off is higher monthly payments. On a £25,000 car at 7.9% APR over 48 months, HP is roughly £548 a month, while PCP on the same car might be around £326 a month but leaves a balloon of several thousand pounds to settle at the end.
Yes, once you've made every payment including any option-to-purchase fee, the car is yours to keep. Unlike PCP there's no balloon to worry about and no mileage limit. During the agreement the finance company owns the car as security, so you can't sell it until it's paid off or you settle the finance early.
Yes. You can ask the lender for a settlement figure at any time and pay off the remaining balance. You may get an interest rebate for settling early, and there can be a small early settlement fee. Under the Consumer Credit Act you also have the right to voluntary termination once you've paid at least half the total amount payable, handing the car back with nothing more to pay if it's in fair condition.
Because the car is security for the loan, missing payments is serious. If you've paid less than a third of the total, the lender can repossess the car without a court order. Once you've paid a third or more, they need a court order to take it back. Always talk to the lender early if you're struggling, as they may be able to adjust the plan.

Comparing options? See the PCP calculator for lower monthly payments, or check how much the car will lose in value with the depreciation calculator. Before you commit, check your take-home pay.