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
15 % — £—
Running costs —/mo
Annual total —
3.5% /yr — £—
£400 /yr
£195 /yr
2% /yr — £—
−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 don't change the effective cost — they just pay that same depreciation off gradually each month instead of leaving it as a lump shortfall at sale.