Type to search calculators
Hire purchase spreads the whole balance after your deposit across equal monthly instalments. Unlike a PCP there is no deferred lump sum, so the monthly payment is higher but the car is yours once the final instalment and the option-to-purchase fee are paid.
Enter the cash price, deposit, APR and term to see the instalment, the total payable and how much of that total is the cost of borrowing.
Last reviewed
Estimated monthly instalment
£399.73
The final fee is treated as a separate payment at the end of the agreement and does not attract interest in this model.
The amount financed is the cash price minus your deposit. Every pound of it is repaid across the term, which is why hire purchase instalments are higher than PCP instalments on the same car.
The finance cost is the total of the instalments minus the amount financed, plus the final fee. It is the price of borrowing rather than the price of the car.
The entered APR is converted to an effective monthly rate, and the instalment is the level payment that clears the financed amount over the term. Interest is charged on the reducing balance, so early payments carry more interest than later ones.
The option-to-purchase fee is added at the end as a separate payment. In this model it is not financed and does not attract interest, which matches how most UK agreements present it.
An 8.9% APR hire purchase agreement with a £10 option-to-purchase fee.
An instalment near £395, with ownership passing after the final payment and fee.
Cash price (£): 18000; Deposit (£): 1800; APR (%): 8.9; Term (months): 48; Option-to-purchase or admin fee at the end (£): 10
Estimated monthly instalment: £399.73
The result depends on the following. If any of them do not match your situation, treat the figure as indicative only.
A single annuity calculation on the financed amount, with the end fee held outside the interest-bearing balance so it appears once and only once in the total payable.
A zero APR divides the financed amount evenly across the term rather than attempting an interest calculation.
Ownership transfers once you have made every instalment and paid the option-to-purchase fee. Until then the finance company owns the vehicle.
It depends on whether you want to keep the car. Hire purchase costs more each month but leaves nothing to settle at the end. PCP costs less monthly but defers a large payment.
Yes. UK consumer credit rules allow early settlement with a rebate of some future interest, and you have a right to voluntary termination once half the total amount payable has been paid. Ask the lender for a settlement figure.
Please note: Results are estimates for general information only and are not financial, tax or legal advice. Figures depend on the assumptions listed on each page and on your personal circumstances.
Estimate monthly payments and total cost on a fixed-payment car loan with deposit and part exchange.
Model a personal contract purchase with a balloon payment, and compare returning or keeping the car.
Estimate equal monthly repayments and total interest for a fixed-rate personal loan.
Estimate an effective annual percentage rate from equal monthly repayments and an upfront fee.