Overview
This PCP vs HP vs lease calculator compares the main ways to fund a car — Personal Contract Purchase (PCP), Hire Purchase (HP), a personal lease (PCH) and paying cash — on a like-for-like basis. Enter the car price, your deposit, mileage and term, plus the key figures for each option, and you'll see the monthly cost, the total cost, whether you end up owning the car, and the true "cost to run" (what you pay minus what the car's worth at the end). It also flags excess-mileage charges, so you can see the real cost at your actual mileage — not just the headline monthly payment.
How it's calculated
Each option works differently, so we compare them fairly:
- PCP — low monthly payments because a large "balloon" (the GMFV) is deferred to the end. You can hand the car back, or pay the balloon to keep it.
- HP — you finance the whole price and own the car outright at the end.
- Lease (PCH) — you rent the car for the term and hand it back; you never own it.
- Cash — you buy outright and recover the resale value later.
The fairest yardstick is the cost to run: total paid minus the value of the car you keep at the end. That way an option that leaves you owning an asset isn't unfairly penalised.
Cost to run = total paid − value of the car you own at the end
Excess mileage = (your mileage − allowance) × years × pence-per-mile. The GMFV is a minimum guaranteed value set by the lender, not a market prediction.
Worked example
A £25,000 car, £2,000 deposit, 12,000 miles a year over 3 years (finance at 8.9% APR, £12,000 GMFV, £300/month lease):
| Lowest monthly | Lease | £300/mo |
|---|---|---|
| Lowest cost to run | Cash | £13,000 |
| PCP (return car) | £438/mo | £18,258 to run |
| HP — owns at end | £16,292 to run |
The lease has the lowest monthly payment (£300) but leaves you owning nothing; cash has the lowest cost to run (£13,000) and you keep the car; HP costs most per month but you own it at the end; PCP sits in between. The "best" option depends on whether you value low monthly payments, lowest overall cost, or ownership — enter your own figures to compare.
Current rates & key facts
Car finance — key facts
| Option | End position |
|---|---|
| PCP | Hand back, pay the balloon to keep, or part-exchange — subject to mileage/condition |
| Hire Purchase (HP) | You own the car once the final payment is made |
| Personal lease (PCH) | Return the car; no ownership and possible damage/mileage charges |
| Cash | You own the car outright from day one |
Running costs (insurance, fuel, servicing, tax) are not included. Returning a PCP or lease car is subject to the agreement’s mileage and condition terms.
Last updated 29 June 2026 · Source: MoneyHelper — Car finance