See monthly cost first. Not just prices
Set to 10% — a typical starting point
Rates vary by lender, the car and your circumstances. Enter whichever rate you want to model.
Estimate only — not a quote or an offer of finance. Figures are illustrations based on the numbers you enter. Actual payments depend on the lender, your circumstances and the agreement type. Key2Car is a marketplace and does not provide finance.
Illustrative estimates only. This calculator shows what a car could cost per month based on the numbers you enter. It is not a quote, an offer of credit or a decision on what you could borrow. Key2Car is an online marketplace. We do not provide, arrange or broker finance, and we are not authorised or regulated by the Financial Conduct Authority (FCA).
The calculator works for any car, new or second-hand, so you can use it to test a budget before you start looking. It works as a hire purchase and conditional sale (HP/CS) calculator or a PCP calculator: choose the tab at the top of the calculator, then enter:
It then shows an estimated monthly payment, the amount financed, the total amount payable and the total cost of credit. Change one number at a time to see what moves the monthly figure most.
The calculator above has an HP/CS tab (hire purchase and conditional sale) and a PCP tab, with a short “What is…?” explainer for each at the top. Hire purchase and conditional sale pay off the whole cost of the car in fixed monthly payments, so they give the same monthly estimate. PCP pays off only part of the cost monthly and defers the rest to an optional final payment, often called the balloon payment or guaranteed future value (GFV). The table sets out how the three usually differ.
| HP | Conditional sale | PCP | |
|---|---|---|---|
| Monthly payments | Higher: pays off the full cost | Higher: pays off the full cost | Lower: pays off part of the cost |
| Final payment | None (a small option-to-purchase fee may apply) | None | Optional lump sum if you want to keep the car |
| Who owns the car | The lender until all payments are made | The lender until all payments are made | The lender unless you pay the final payment |
| Mileage limit | Usually none | Usually none | Usually yes, with charges for going over and for damage |
| At the end | You own the car (once any option fee is paid) | You own the car | Pay to keep it, hand it back or part-exchange it |
PCP is more common on newer cars, so availability on older used cars varies by lender. None of these is better for everyone. Compare the total amount payable as well as the monthly figure, and read the agreement and the pre-contract information before signing. For impartial guidance on borrowing, see MoneyHelper.
The amount you finance is the car price minus your deposit. Interest is then added at the rate you choose, and the total is spread across the term as equal monthly payments. With a PCP-style agreement, the optional final payment is taken out of the amount being paid off monthly, which is why monthly figures are lower but a large payment is due at the end if you want to keep the car.
That means four numbers decide your payment: the price, the deposit, the length of the agreement and the interest rate. A bigger deposit means a smaller amount borrowed. A longer term lowers each monthly payment but usually means you pay more interest overall.
The calculator treats the APR you enter as an effective annual rate and converts it to a monthly rate: monthly rate = (1 + APR)1/12 − 1. The monthly payment is then:
payment = (amount financed − final payment × (1 + monthly rate)−months) × monthly rate ÷ (1 − (1 + monthly rate)−months)
With hire purchase there is no final payment, so that part drops out. The total amount payable is your deposit plus every monthly payment plus any final payment, and the total cost of credit is that total minus the price of the car.
Here is the same sum for one car, with the APR changed each time. The 5%, 10% and 15% rates are only there to show how the maths responds. They are not typical rates and not offers.
| APR entered | Monthly payment | Total amount payable | Total cost of credit |
|---|---|---|---|
| 5% | £207 | £10,927 | £927 |
| 10% | £226 | £11,867 | £1,867 |
| 15% | £246 | £12,818 | £2,818 |
Figures are rounded to the nearest pound. In this example each extra five points of APR adds roughly £20 a month and about £950 to the total cost, which is why it pays to compare the total and not only the monthly figure. The calculator does not include arrangement or option-to-purchase fees, insurance, road tax or running costs.
A deposit reduces the amount you need to finance, which lowers both the monthly payment and the interest you pay. The calculator starts with a deposit of 10% of the car price, but you can enter any amount.
APR stands for annual percentage rate. It is a yearly measure of the cost of borrowing, so it lets you compare different credit offers on the same basis. Lenders usually advertise a “representative APR”. Under UK rules this rate must be available to at least 51% of the people who are accepted, which means your own rate could be higher or lower. The only way to find out your rate is to ask a lender, who will check your circumstances.
The term is how long the agreement runs, often somewhere between one and five years. Shorter terms have higher monthly payments but cost less in total. Longer terms are easier month to month but add interest.
A car finance calculator like this one gives an estimate. You choose the numbers, including the APR, and it shows what the payments would be if a lender agreed those terms. Nobody has checked your circumstances and nothing is on offer.
A car finance quote comes from a lender or broker after they have looked at the car and at you, including your income, your existing commitments and your credit record. It sets the rate you would actually pay and may differ from the rate you tried here. A quote is still not an agreement: approval is never guaranteed, and you should read the agreement and the pre-contract information carefully before signing. Some lenders offer an eligibility check that does not affect your credit score before a full application, but practice varies, so ask before you apply.
Adverts for credit usually show a representative example: a typical amount borrowed, term, representative APR, monthly payment and total amount payable. It illustrates the deal as advertised and is not a prediction of the terms you will be offered. Use the calculator to test your own figures, then compare real quotes on the same basis: APR, term, monthly payment and total amount payable.
The monthly payment is only part of the picture. The total amount payable is everything you would pay over the agreement: your deposit, all the monthly payments and, with a PCP, the optional final payment if you choose to keep the car. The total cost of credit is that total minus the price of the car, in other words the extra you pay for borrowing. Always compare the total as well as the monthly figure.
This calculator cannot tell you how much a lender would let you borrow. Lenders decide that after checking your income, existing commitments and credit history, and approval is never guaranteed.
What you can do here is work out what you are comfortable paying. Add up your monthly outgoings, then leave room for insurance, fuel, tax and servicing as well as the finance payment. Try a few combinations of deposit and term to see which monthly figure fits, and aim for a total cost you are happy with, not only a low monthly number. For free, impartial guidance on borrowing, see MoneyHelper.
Ready to look? Search used cars by price or monthly budget, or browse all used cars for sale.
An estimate uses numbers you choose. A quote is from a lender or broker after they assess you and sets the actual rate and monthly payment. See the section above for how they differ.
No. It gives an illustrative estimate from the figures you enter. A real quote can only come from a lender, who will check your circumstances and set the rate.
No. Key2Car is an online used-car marketplace. We do not provide, arrange or broker finance, and we are not authorised or regulated by the FCA.
Yes. Enter the asking price of any new or used car, a deposit, a term and an APR to estimate the monthly cost.
Enter whichever rate you want to model. Rates depend on the lender, the car and your circumstances, so the figure here is a guess to test with, not an offer.
It lowers the monthly payment, but you usually pay more interest over the whole agreement, so the total cost is higher.
It subtracts your deposit from the price, converts the APR you enter into a monthly rate and spreads the repayment over the number of months, allowing for any optional final payment. The formula and a worked example are further up this page.
On a PCP-style agreement part of the cost is deferred to the end of the term. That deferred amount is often called the final payment, balloon payment or guaranteed future value (GFV). Paying it is optional: you can pay it to keep the car, or hand the car back or part-exchange it, subject to the agreement’s terms such as mileage and condition.
No. It covers repaying the amount financed with interest. Any lender fees, insurance, road tax, fuel and servicing are extra and vary by lender and by car.
No. A flat rate is worked out on the original amount borrowed for the whole term, so it looks lower than the APR for the same deal. APR is the standard way to compare the cost of credit, so compare APR with APR.
With hire purchase you pay off the full cost of the car in fixed monthly payments and own it at the end. With PCP you pay off part of the cost monthly and have the option of a final payment to keep the car, hand it back or part-exchange it. See the comparison table above.
