True Car Cost
Car Finance
Interest-only finance — real monthly cost across every depreciation and appreciation scenario
Deposit (cash)
£12,000
Amount financed
£48,000
Monthly interest
£396
Total interest
£19,008
Price
£60,000
Rate
9.9%
Deposit
20%
Term
48mo
£60,000
9.9 % per year
20 % of price
48 months
−10 % max drop
+10 % max gain
−100%−50%0%+50%+100%
| Scenario | Value at end | Gain / loss | Shortfall | Total cost | Eff. monthly cost |
|---|
Appreciation — car gains value
Depreciation — car loses value
Break-even / flat value
How it works: Effective monthly cost = (total interest + value lost − value gained) ÷ term. If the car appreciates enough to exceed the interest paid, the effective monthly cost goes negative — meaning the car made you money. Your deposit isn't a separate cost: only the change in the car's value matters. Shortfall is the cash you'd have to find at sale to clear the loan — it is already part of the value lost, so it isn't counted twice. PCP payments just pay that depreciation off as you go, so they only change the effective cost through any return you earn on that money.