PCP vs personal loan on a £30,000 car
The PCP keeps the monthly payment lower by leaving £12,000 until the end. The personal loan repays the whole borrowed amount through the monthly instalments.
Result under these assumptions: the personal loan costs approximately £33,849 in total. PCP costs approximately £36,113 if the balloon is paid—about £2,264 more, despite the lower monthly payment.
Assumptions
Payment comparison
| PCP — keep the car | Personal loan | |
|---|---|---|
| Payment today | £3,000 deposit | £3,000 cash contribution |
| Monthly payment | £439.85 | £642.68 |
| Final payment | £12,000 | £0 |
| Total paid | £36,112.97 | £33,848.84 |
| Ownership | After required payments, including balloon | You normally buy immediately; the unsecured loan continues separately |
Monthly payments are displayed to the nearest penny. Totals use the unrounded calculated payment, so multiplying the displayed monthly figure can differ slightly.
Estimated cost after the car’s value
If the car is worth £15,000 after four years, subtracting that same retained value gives an estimated cost of approximately £21,113 for PCP and £18,849 for the personal loan. The resale-value assumption does not explain the difference here; borrowing cost and payment timing do.
Why the personal loan is not automatically better
- The rate available to you may be higher or the lender may not offer the full amount.
- A PCP manufacturer contribution could reduce the effective price.
- The PCP return option can protect against a car worth less than its guaranteed future value, subject to the contract.
- The higher personal-loan monthly payment may not fit your budget even if total cost is lower.
Compare the offers you have actually received
Use quoted monthly payments where possible, include the PCP balloon and fees, and enter the same expected car value for both ownership outcomes.
Compare PCP and personal loan →Continue reading
Independent background: MoneyHelper’s overview of ways to finance a car.
Published and reviewed September 2026 · Illustrative educational example