Asset Finance / Hire Purchase Calculator
Work out the monthly repayment and total cost of financing a vehicle or piece of equipment via hire purchase, lease or PCP, including any final balloon payment.
Data verified · July 2026
How does a balloon payment change the monthly cost?
It reduces the amount amortised monthly, because only the non-balloon portion of the loan is repaid in instalments — the balloon itself is settled separately at the end (paid, refinanced, or the asset returned, depending on the agreement type).
Source: FCA — Consumer credit / car finance guidance (gov.uk/consumers/car-finance); Finance & Leasing Association (FLA) hire purchase and PCP explainers (fla.org.uk), 2025/26. · updated 2026
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Everything about Asset Finance / Hire Purchase Calculator
📋Overview+
The amount financed is the asset price less any deposit, repaid over the term via a reducing-balance annual interest rate. If you set a balloon (or PCP-style final payment), its present value is deducted from the amount amortised each month, so the monthly instalment only repays the non-balloon portion — the balloon itself falls due as a lump sum at the end.
💡 Best practices
- A lower monthly payment with a large balloon shifts cost to the end of the agreement — check you can afford (or refinance) the balloon when it falls due.
- Compare the annual interest rate, not just the monthly payment, across lenders — a longer term can look cheaper per month but cost more overall.
- Putting down a larger deposit reduces both the amount financed and the total interest paid.
🔢 Concrete example
£30,000 asset price, £3,000 deposit, 8% annual rate over 36 months, no balloon: roughly £846/month, with total interest of around £4,470 over the term.
📖User guide+
How to use this calculator
- 1
Enter the asset's price and any deposit you're putting down.
- 2
Enter the annual interest rate quoted by the lender and the term in months.
- 3
If it's a PCP or finance lease, enter the balloon/final payment.
- 4
Read the monthly payment, total cost and effective cost rate.
📚Glossary+
- Balloon payment
- A large final payment (common in PCP and finance leases) due at the end of the agreement, which keeps the monthly instalments lower during the term.
- Effective cost rate
- Total interest paid over the agreement expressed as a percentage of the asset's price — a quick way to compare financing offers of different terms and rates.
ℹ️Sources & updates+
Last data update
July 7, 2026
Sources and references
FCA — Consumer credit / car finance guidance (gov.uk/consumers/car-finance); Finance & Leasing Association (FLA) hire purchase and PCP explainers (fla.org.uk), 2025/26.
The data in this calculator is updated regularly to reflect the latest official rates. When in doubt, consult the official sources listed above.
FAQ — Asset Finance / Hire Purchase Calculator
How does a balloon payment change the monthly cost?+
It reduces the amount amortised monthly, because only the non-balloon portion of the loan is repaid in instalments — the balloon itself is settled separately at the end (paid, refinanced, or the asset returned, depending on the agreement type).
Is the effective cost rate the same as the APR?+
Not exactly — the effective cost rate here is total interest divided by asset price, a simple comparison metric. The APR quoted by lenders follows FCA-mandated disclosure rules and can differ slightly depending on fees included.