Finance Calc App

UK Car loan calculator

Estimate your monthly car payment, total interest, and out-the-door cost — with down payment, trade-in, and optional purchase tax.

By Mitch Duncan Last reviewed Methodology

Car & loan details

Monthly payment
£520.99
Amount financed
£26,000.00
Total interest
£5,259.20
Total of payments
£31,259.20
Out-the-door cost
£35,259.20

Out-the-door cost includes your down payment, trade-in value, and every loan payment. It excludes registration, insurance, and dealer fees.

How car finance works in the UK

This calculator models a straightforward fixed-rate Hire Purchase (HP) or personal loan: you borrow the cash price (advertised VAT-inclusive in the UK), put down a deposit, and repay a fixed amount each month until the car is yours. Since prices already include VAT, leave the purchase-tax option off.

Amount financed = cash price − deposit − part-exchange value

HP vs. PCP

The other common option, Personal Contract Purchase (PCP), works differently: you finance only the depreciation over the term, with low monthly payments and a large optional "balloon" (the guaranteed future value) at the end if you want to keep the car. PCP monthly payments look cheaper, but you don't own the car unless you pay the balloon — this calculator models full-ownership HP, not PCP.

APR and the deposit

Compare deals on the representative APR, which bundles in fees. Only the advertised rate is guaranteed to at least 51% of accepted customers — your actual rate depends on your credit file. A bigger deposit or part-exchange lowers the amount financed and the total interest.

What this calculator doesn't cover

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Frequently asked questions

How is a car loan payment calculated?
A car loan uses the standard amortization formula: payment = P × r ÷ (1 − (1 + r)⁻ⁿ), where P is the amount financed, r is the monthly rate (APR ÷ 12), and n is the number of months. The amount financed is the vehicle price, plus any purchase tax, minus your down payment and trade-in. A longer term lowers the payment but increases total interest.
Does a bigger down payment reduce the cost?
Yes. A down payment reduces the amount you finance dollar-for-dollar, so you pay interest on a smaller balance — lowering both the monthly payment and the total interest. A larger down payment also reduces the risk of being 'underwater' (owing more than the car is worth) early in the loan.
Should I include sales tax in the loan?
It depends where you buy. In places where tax is added at purchase (such as the US and most of Canada), the tax is usually rolled into the financed amount, so turn the purchase-tax option on. Where advertised prices already include tax (UK VAT, Australian GST), leave it off to avoid double-counting.
What is APR and why does it matter?
APR (annual percentage rate) is the yearly cost of the loan including mandatory fees, which makes it the fairest way to compare lenders. A low headline interest rate paired with fees can cost more than a higher rate with none. Compare offers on APR, and check whether 0% financing is offered instead of a cash rebate.
Is a longer loan term cheaper?
Only month to month. Stretching the term (say from 60 to 84 months) lowers the monthly payment but increases the total interest you pay and keeps you owing more than the car is worth for longer. Shop by total cost and APR, not by the monthly payment a dealer quotes.
Does this include insurance and running costs?
No. This estimates the loan payment, interest, and out-the-door financed cost only. Insurance, fuel or charging, servicing, registration, and any dealer or documentation fees are separate ongoing costs you should budget for on top of the loan.

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