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Financial

Car Loan Calculator

Compare Hire Purchase (HP) and Personal Contract Purchase (PCP) finance using the vehicle price, deposit, term, APR, fees, and guaranteed future value.

car loanauto financevehiclehire purchasehppersonal contract purchase

Calculator

Calculate instantly

Choose your car finance type

HP spreads the full financed balance across the term. After all instalments are made, no large balloon remains.

HP Cost Breakdown

All figures update immediately when you move a slider or change the finance type.

Deposit$5,000.00
Monthly instalments total$35,379.45
Final balloon$0.00
Interest and charges$5,379.45
Total payable$40,379.45

HP Balance Snapshot

Year 1
$6,694.05 principal / $2,150.82 interest / $23,555.95 balance
Year 2
$7,242.45 principal / $1,602.41 interest / $16,313.50 balance
Year 3
$7,835.78 principal / $1,009.08 interest / $8,477.72 balance
Year 4
$8,477.72 principal / $367.14 interest / $0.00 balance

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Trust note

Important estimate

This calculator is informational and should be verified before financial, health, legal, engineering, laboratory, or safety-critical decisions.

High risk contextDifficulty: advancedConfidence estimate: 87/100Reviewed 2026-06-12Reviewed by: Finance content reviewerCalculator vuces-2.1 / Formula vformula-1.04 sources listed

Formula and Explanation

HP: payment = P x r(1+r)^n / ((1+r)^n - 1); PCP: payment = (P(1+r)^n - balloon) x r / ((1+r)^n - 1)

HP repays the full financed balance through monthly instalments. PCP leaves a guaranteed future value as an optional final payment, so the monthly payment is calculated after discounting that future balloon back across the finance term.

Variable descriptions

vehiclePrice($)
Vehicle price: Vehicle price measured in $, entered as a known value.
deposit($)
Deposit: Deposit measured in $, entered as a known value.
apr(%)
Interest rate / APR: Interest rate / APR measured in %, entered as a known value.
termMonths(months)
Loan term: Loan term measured in months, entered as a known value.
fees($)
Fees financed: Fees financed measured in $, entered as a known value.
balloon($)
Guaranteed future value / balloon: Guaranteed future value / balloon measured in $, entered as a known value.

Formula Notes

  • Use consistent units for values that are multiplied, divided, or compared.
  • Results may be rounded for readability, while the calculator keeps greater precision internally.
  • Rates, fees, taxes, and lender conventions can change the real-world total.

Common uses

  • Compare HP and PCP
  • Estimate a monthly car payment
  • Review a PCP balloon payment
  • Compare total finance charges

Assumptions

What this calculation assumes

  • Currency, rate period, and payment period are assumed to match.
  • Fees, taxes, insurance, and penalties are included only when the calculator asks for them.
  • Inputs are assumed to describe the same scenario and use compatible units.
  • Results may be rounded for readability.

Avoid mistakes

Quick checks before you rely on the result

  • Using an annual rate where a monthly rate is required.
  • Ignoring fees, taxes, insurance, or lender-specific rules.
  • Mixing units, periods, currencies, or measurement systems without converting first.
  • Rounding intermediate values too early.

Step-by-Step Explanation

Follow the reasoning, not only the final number.

  1. 1

    Set up the calculation

    Enter the known values in the calculator fields.

    Starting with clearly defined values and units prevents the most common calculation errors.

  2. 2

    Work through step 2

    Keep the units consistent with the labels shown beside each input.

    This step transforms the known values into the form required by the formula.

  3. 3

    Work through step 3

    Apply the formula: HP: payment = P x r(1+r)^n / ((1+r)^n - 1); PCP: payment = (P(1+r)^n - balloon) x r / ((1+r)^n - 1).

    This step transforms the known values into the form required by the formula.

  4. 4

    Interpret the result

    Review the primary result and supporting values.

    Compare the result with your real-world goal, such as compare hp and pcp.

Worked example

Practical car loan calculator example

Known values

  • Vehicle price: 35,000 $
  • Deposit: 5,000 $
  • Interest rate / APR: 7.9 %
  • Loan term: 48 months
  • Fees financed: 250 $
  • Guaranteed future value / balloon: 14,000 $

Calculation

  1. 1. Start with the known values shown for this car loan calculator scenario.
  2. 2. Substitute those values into HP: payment = P x r(1+r)^n / ((1+r)^n - 1); PCP: payment = (P(1+r)^n - balloon) x r / ((1+r)^n - 1).
  3. 3. Evaluate the expression and keep the requested unit and rounding.

Result and meaning

Amount financed: $30,250; Deposit percentage: 14.29%

Calculator guide

About this Car Loan Calculator

Compare Hire Purchase and Personal Contract Purchase monthly payments, balloon payments, total payable, interest, and finance charges. This page includes an interactive calculator, concise formula notes, worked examples, FAQs, related calculators, and practical guidance you can revisit whenever needed.

car loanauto financevehiclehire purchasehppersonal contract purchasepcpballoon paymentguaranteed future value

References

Sources used for this calculator

Found something that does not look right?

We work hard to keep every calculator accurate and useful. If you notice a calculation error, missing option, or unclear explanation, please let us know so we can review and correct it promptly.

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Calculator usage

Usage information loads after the calculator is ready.

FAQ

Car Loan Calculator FAQs

How does the car loan calculator work?+

It uses HP: payment = P x r(1+r)^n / ((1+r)^n - 1); PCP: payment = (P(1+r)^n - balloon) x r / ((1+r)^n - 1) and calculates the result from the values you enter.

Can I copy or print the result?+

Yes. AZCalculate calculator pages include copy, share, and print actions.

What affects interest cost?+

Rate, term, payment timing, fees, compounding, and early payments can all change total interest.

Is this financial advice?+

No. It is an informational estimate. Verify important decisions with a qualified financial professional or lender.

How should I use this calculator result?+

Use it as an estimate and compare it with the formula, assumptions, and examples shown on the page.

Why can real-world results differ?+

Real-world inputs can include local rules, changing rates, measurement tolerances, and conditions outside the core formula.

What information do I need for the car loan calculator?+

Enter the known values requested by the calculator. Use the unit selectors where available and make sure the values describe the same scenario.

How accurate is the car loan calculator?+

The calculator follows the formula shown on this page. Accuracy depends on the values, units, assumptions, and rounding used in your scenario.

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Car Loan Calculator - AZCalculate | AZCalculate