How to Get Approved for Car Finance When you are in an IVA

One question we get every day here at Motorly is how your credit history, credit rating and current financial obligations impact your ability to take out a Car Finance Agreement. This is especially true for those who are in an Individual Voluntary Arrangement (IVA).

If you are in an IVA, it can feel like someone has jammed on the hand break when it comes to obtaining car finance, with many people assuming that it is simply isn’t possible. However, with the help of a trusted broker such as Motorly, you may be able to get the finance you need.

Whilst being in an IVA does make the process a little longer, here at Motorly we pride ourselves on being IVA Car Finance specialists, assisting people in an IVA just like yourself get behind the wheel of a new car.

What do I need to do to get car finance when I am in an IVA?

If you are currently in an Independent Voluntary Agreement (IVA), you will need to get permission from your IP (Insolvency Practitioner) to enter the new credit agreement when the finance is over a certain amount.

For you, it means that if you want to take out a new credit arrangement for anything above £500 that is not for essential utilities, you will need a letter of confirmation from your IP to go ahead. This includes taking out car finance.

The reason for this is that your Insolvency Practitioner wants to ensure that you do not get into further debt by starting new finance agreements that you cannot afford. It enables you to continue paying off your debts as agreed.

How do I get the Insolvency Practitioner to agree to this new Car Finance Agreement?

To make sure that your IP allows you to take out a new car finance agreement, there are two vital stages to ensure you are given permission to enter a new car finance arrangement. They are:

Prove to your Insolvency Practitioner you can afford the car finance agreement

This involves showing to your IP that if you take out this new finance agreement, you will still be able to pay your current debts and responsibilities. It’s important at this stage to understand what your outgoing and obligations currently are and work out what you can afford to be paying out monthly for car finance. Our team of dedicated sales experts can help you work out what is a suitable figure for your circumstances.

Prove to your Insolvency Practitioner you need to take out car finance

This step involves proving to your IP that not only do you need to take out car finance but that it’s a vital agreement for you to enter. This could be, for instance, proving that you need to get the car to travel to work or that the cost of buying and operating the car is cheaper than relying on public transport and taxis to get around. If you can show that a car is either a work necessity or will save you money over the long term, your IP may approve the car finance agreement.

The good news is that if you can show that you can still afford the car finance deal without putting yourself at further risk of insolvency, you are one step closer to getting your new car. Your Insolvency Practitioner understands that getting to work is important, and if owning a car will enable you to continue working or even save you money, then you have a great chance of getting the confirmation letter you need.

Ready to find out more? Start your next motoring journey now by visiting the motorly IVA Car Finance page