Car finance calculator
This calculator works out the monthly payment and total cost of a loan or Hire Purchase deal from the price, deposit, APR and term entered, using standard amortisation. On a £20,000 car with a £2,000 deposit over 48 months at 9.9% APR, the estimated monthly payment is £456, totalling £23,872, of which £3,872 is interest. No statutory rate applies here.
What are you really paying for?
The headline on a finance advert is the monthly payment, but that number alone hides the cost. Two figures decide the total: the APR, which is the true yearly cost of borrowing, and the term, the number of months the payments run for. A longer term drops the monthly payment yet adds interest, because the money is owed for longer.
This tool spreads the borrowed amount, the price minus the deposit, across the term at the APR and shows the monthly figure, the total to own the car and the interest inside it together. Comparing deals on APR rather than the flat rate, which is charged on the full amount for the whole term and looks deceptively low, is the reliable way to compare offers.
What does the worked example show?
Take a £20,000 car with a £2,000 deposit, so £18,000 is borrowed, over 48 months at 9.9% APR. The monthly payment is £456. Across the 48 months that is £21,872 on the loan, plus the deposit, so £23,872 to own the car. Of that, £3,872 is interest. Stretch the same deal to 60 months and the monthly payment drops, but the interest climbs.
Common questions
How is the monthly car payment worked out?
The deposit is taken off the price to get the amount borrowed, then that balance is spread over the term using the standard amortisation formula at the APR. Early payments are mostly interest, later ones mostly capital, but the monthly amount stays level.
What is the difference between APR and flat rate?
APR is the true yearly cost of the borrowing, including how the balance falls as you repay. A flat rate is charged on the whole original amount for the full term, so it looks smaller but costs more. Always compare deals on APR, and enter the APR here.
Does a bigger deposit reduce the cost?
Yes. A larger deposit means you borrow less, so both the monthly payment and the total interest fall. It can also unlock a lower APR on some deals. The trade-off is tying up that cash up front.
Is this the same as PCP?
No. This models a straightforward loan or Hire Purchase where you own the car at the end and there is no final balloon payment. PCP defers a large lump sum to the end, which lowers the monthly figure but changes the total. Use the PCP vs HP tool for that comparison.
Does the total include the deposit?
Yes. The total cost shown is the full amount you pay to own the car outright, the deposit plus every monthly payment. The interest figure is that total minus the cash price.
What are you really paying for?
The advertised monthly payment alone hides the true cost, because two figures decide the total: the APR, which is the real yearly cost of borrowing, and the term, the number of months the payments run for. A longer term lowers the monthly payment but adds interest, since the money is owed for longer. Comparing deals on APR rather than a flat rate, which is charged on the full amount for the whole term, avoids being misled by a headline figure.
What does the worked example show?
On a £20,000 car with a £2,000 deposit, £18,000 is borrowed over 48 months at 9.9% APR. The estimated monthly payment is £456, coming to £21,872 repaid on the loan plus the deposit, so £23,872 in total to own the car, of which £3,872 is interest.
Sources & Rate Verification
Rates verified against official statutory guidance on 6 September 2026.