PCP calculator: the four inputs every PCP car finance calculator is working from

PCP finance calculator inputs, and which way each moves the payment

1. Amount financed: price minus deposit, plus anything added in. Start from the on-the-road price, subtract the deposit and any part-exchange equity, then add anything rolled in: negative equity from the last agreement, an admin fee, add-ons sold in the finance office. Everything added here is financed at the agreement's rate for the whole term.
2. Term: longer cuts the payment and raises the total. Stretching a four-year agreement to five lowers the monthly figure and raises the total amount payable, because interest runs for another twelve months. On a PCP it also means you are further from the deferred payment when the car is at its most saleable.
3. Rate: compare APR, and read what the APR includes. The annual percentage rate is the comparable figure because it folds in compulsory fees as well as interest. A flat rate quoted by a dealer is not comparable to an APR and is usually close to half of it, which is why the same agreement can be described two very different ways.
4. The deferred payment: the lever nobody quotes. A higher guaranteed minimum future value cuts the monthly payment and raises what is owed at the end. A calculator that does not let you set it is showing one scenario out of many, which is the usual reason two calculators disagree on the same car by a wide margin.

A pcp equity calculator is one subtraction, and only one number is yours to find

Equity on a PCP is what the car is worth today minus what it would cost to settle today, and nothing else enters it. The settlement figure comes from the funder and is the only figure you cannot estimate reliably, because it carries the statutory rebate for settling early rather than simply the payments left. The trade value is the other half, and it is the one a dealer will quote you for nothing.

The guaranteed minimum future value is not the settlement figure and using it in its place is the common error. It is what the funder will accept for the car at the END of the agreement, so part way through it tells you only whether equity is likely, not how much there is.

Common questions

Why does the dealer's figure differ from a PCP loan calculator?

Usually because the dealer is quoting a manufacturer-supported rate with a deposit contribution attached, or has set a different future value. Ask for the amount financed, the term, the APR and the final payment, and any calculator will reproduce their number.

Car finance calculator PCP: what is the difference between flat rate and APR?

A flat rate applies interest to the original balance for the whole term, ignoring what you have repaid. APR reflects the reducing balance and compulsory charges, so it is the only figure that compares two agreements honestly.

Car PCP calculator: does a bigger deposit always save money?

It lowers the amount financed and therefore the interest, so yes in total terms. Whether it is the best use of the money is a separate question, and on a PCP a large deposit is at risk in a way a monthly payment is not if the car is later written off.

Can I calculate the settlement figure myself?

Approximately, but only the lender's figure binds. Section 94 of the Consumer Credit Act 1974 gives you the right to settle early and to be told the amount, with the rebate the Act allows applied.

Does an HP car finance calculator work the same way?

Yes, with one input fewer. Hire purchase repays the whole balance across the term, so there is no deferred final payment to set: the amount financed, the term and the APR decide the monthly figure and the total amount payable.

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