Car finance is possible during an active IVA. The process is more involved than a standard application – there is a legal borrowing threshold, a required step with your insolvency practitioner, and a narrower set of finance partners than you would have access to outside of an arrangement. But once you know the order of steps, it becomes much easier to know what to do next.
A car can be essential for work, childcare and daily life. This guide explains how car finance works during an active IVA, what your insolvency practitioner needs to approve, why hire purchase is almost always the route available, and how to apply the right way.
Can you get car finance during an IVA?
Yes, but two conditions need to be in place. You need written permission from your insolvency practitioner (IP), and you need to apply through a specialist finance partner. Mainstream finance partners tend to decline applications from people in an active IVA. It is more accurate to say the usual route is not available than to say finance is not available at all. The finance partners willing to consider these applications are fewer, and they want to see that the finance has been properly approved within the terms of your arrangement.
If you are weighing up whether to apply now or wait until the IVA ends, both can be the right call. If you need a car now and the monthly payment can be made affordable within your existing budget, there is no reason to put your life on hold until completion. This guide covers how to find out whether that is possible.
The £500 borrowing threshold – what it means and why it matters
Most IVAs include a standard rule that you cannot take on new credit above £500 without permission from your IP. Car finance during an IVA will almost always exceed that threshold, which is why this step matters.
An IVA is a formal legal agreement with your creditors. Your monthly budget and contribution have been worked out on the basis of what you can afford. Taking on a new credit agreement without approval puts pressure on the arrangement and creates a risk that it no longer works as intended.
Borrowing above £500 without IP approval is a breach of your agreement. In serious cases a breach can cause the IVA to fail – the arrangement collapses, the legal protection it provides disappears, and your original creditors can resume collection activity. Our guide to car finance with a CCJ covers how other credit events interact with specialist finance if that is relevant to your situation.
Speak to your IP first. Once you know where you stand, you can look at the finance side.
Getting permission from your insolvency practitioner
This is the most important step in the process, and the one many people do not realise exists until they are already halfway through an application.
Before applying for IVA car finance, speak to your insolvency practitioner and explain why you need the car. If it is needed for work, school runs or essential daily travel, say so. Your IP is not looking for a perfect story. They are assessing whether taking on the finance is reasonable and affordable within your arrangement.
What you need from that conversation is a written letter confirming that the proposed finance agreement is acceptable under the terms of your IVA. The letter will typically state the maximum monthly payment your IP has approved and may include a borrowing cap. Specialist finance partners will ask to see this document, so it needs to be in place before you submit anything.
Your IP will look at your income, your IVA contribution and your monthly outgoings to assess how much room there is in your budget for a car payment. They may set a maximum monthly repayment or advise on the vehicle budget most likely to be acceptable.
If your current IVA budget does not leave enough room, that does not automatically mean the answer is no. Your IP can propose a variation to the arrangement, which means asking creditors to agree to a reduction in the monthly IVA contribution to make room for essential car costs. It is not guaranteed and will depend on your circumstances, but it is a genuine option that almost no other guide mentions. If affordability has been flagged as an obstacle, it is worth raising directly with your IP.
Do not apply first and hope the permission can be sorted later. Start with your IP, get clarity on what is possible, then move to the application.
Why HP car finance is usually the only option during an active IVA
The two most common types of car finance in the UK are hire purchase (HP) and personal contract purchase (PCP). During an active IVA, HP car finance is almost always the only realistic route.
PCP involves a large balloon payment at the end of the agreement. Most specialist finance partners who work with IVA applicants will not offer PCP during an active arrangement because the balloon payment creates an additional financial obligation that sits outside the regular monthly budget, making affordability harder to assess within the IVA terms.
With HP, monthly payments are fixed for the full term, there is no balloon, and you own the vehicle outright once the final payment is made. The fixed payment structure is also why IPs are more willing to approve it – the monthly commitment is predictable and verifiable.
It helps to know this before you start. Otherwise you can end up thinking the problem is your application, when the issue is simply that PCP is not available to most active IVA applicants.
A deposit, if you can put one forward, will strengthen your application. A lower loan-to-value ratio reduces the finance partner’s risk and can improve the terms available to you.
What finance partners look at when you’re in an IVA
Specialist finance partners who consider active IVA car loan applications are not looking for a clean credit profile. They are assessing whether the application is sensible and affordable, and whether it has been properly approved.
The first thing any specialist finance partner will want to see is the IP permission letter. Without it, the application will not progress. Beyond that, they look at stable income – a consistent salary or regular self-employed income gives confidence that the monthly payment can be maintained. Affordability matters as much as credit history, sometimes more.
How long you have been in the IVA is also a factor. Someone two or three years into a five or six year arrangement may be viewed more positively than someone at the very start, because a sustained track record of managing the arrangement counts for something.
Vehicle choice matters too. A lower-value car is easier to place with a finance partner than a more expensive one. The more proportionate the vehicle and payment level, the stronger the application tends to be.
Finance arranged during an active IVA will carry a higher interest rate than mainstream car finance. That is the reality of specialist lending in this situation. It is worth going in with that expectation so you can judge the deal on whether it gets you back on the road, rather than against headline rates aimed at a completely different customer.
What happens to your IVA after you have car finance?
A common concern is whether taking on car finance will put the IVA at risk. Provided your IP has given written permission and the payment is affordable within your arrangement, it will not. The approval process exists to prevent the finance from creating a problem – once it is in place, the car finance sits within your budget rather than outside it.
Making your payments on time also begins to rebuild your credit profile. The IVA will remain on your credit file for six years from the date it started, not from when it ends, but on-time payments on a new agreement are positive markers. They show stability and consistency, which matters once the IVA completes and your options start to open up.
How to apply for car finance with an active IVA through Motorly
The process is three steps.
First, speak to your insolvency practitioner and get the permission letter in place. Ask what level of monthly payment would be considered affordable and whether there are any limits to stay within. This comes before anything else.
Second, apply through Motorly using a soft search. You can check your options without leaving a mark on your credit file and with no impact on your IVA.
Third, we match your application to specialist finance partners who understand active IVA cases and assess them individually. If approved, you can buy from any franchised or independent dealer in the UK.
Representative example: Borrowing £5,500 over 48 months with a representative APR of 22.9% (fixed) and a deposit of £0.00, the amount payable would be £169.72 a month, with a total cost of credit of £2,646.56 and a total amount payable of £8,146.56. Rates from 8.9% APR – the exact rate you will be offered will be based on your circumstances, subject to status.
Can I get car finance while I’m still in an active IVA?
Yes. You need written permission from your insolvency practitioner and you need to apply through a specialist finance partner rather than a mainstream one. Meet both conditions and an application is viable regardless of where you are in the IVA term.
Do I need my insolvency practitioner’s permission to get car finance?
Yes. Under the terms of most IVA agreements, you cannot take on new credit above £500 without written IP approval. Car finance almost always exceeds this threshold. Applying without permission in place is a breach of your arrangement.
What does the IP permission letter need to say?
The letter should confirm that the proposed finance agreement is acceptable within the terms of your IVA. It will typically state the maximum monthly payment your IP has approved and may include a borrowing cap. Specialist finance partners will ask to see this document as part of your application.
Can I get PCP car finance during an IVA?
In most cases, no. PCP involves a balloon payment at the end of the term that most specialist IVA finance partners will not offer during an active arrangement. Hire purchase is the standard route – fixed monthly payments, no balloon, and ownership at the end of the term.
Will applying for car finance affect my IVA?
Applying through Motorly uses a soft credit search and will not affect your IVA or your credit file. If you proceed with finance that has been approved by your IP and the payment is within the agreed budget, the car finance will not put your arrangement at risk.
How long does an IVA stay on my credit file?
An IVA stays on your credit file for six years from the date it started, not from when it ends. If your IVA started in 2022, it drops off in 2028 regardless of your completion date. After that, your options for mainstream credit expand significantly.
If you are on a Debt Management Plan and need a car, the big question sitting in your head is probably this:
Does this shut the door completely?
The short answer is no.
A DMP does not automatically rule out car finance. It does change how finance partners look at your application. There is also one important step most people miss before they even start searching for a car.
In this guide, we will walk through what actually happens, what finance partners care about, and how to give yourself the strongest possible chance of approval.
What Is a Debt Management Plan (DMP)?
In simple terms, a DMP is a structured way of paying back unsecured debts.
Instead of juggling multiple payments, you make one monthly payment to a debt management company, which should be FCA-authorised, or a charity like StepChange. They then distribute the money to your creditors.
A DMP usually covers things like:
Credit cards
Personal loans
Overdrafts
It does not cover secured debts like mortgages or existing car finance.
One thing that often worries people is this. A DMP stays on your credit file for six years from the date it was set up, even if you have completed it.
But here is the important part.
That does not mean you are blacklisted. It simply means finance partners see context.
It is also worth knowing how a DMP differs from an IVA. A DMP is informal. It is not legally binding and it is not registered as insolvency. An IVA is formal and court-backed insolvency.
That distinction matters. Lenders generally see a DMP as far less severe than an IVA or bankruptcy. That works in your favour.
If your DMP is still active, your agreement almost certainly says you must get permission before taking on new credit. Skipping this is not just a technicality. It can put your arrangement at risk.
The reason is simple. Your DMP provider is managing repayments on behalf of your creditors. A new finance agreement changes the affordability picture.
That said, providers understand real life. For most people, a car is not a luxury. It is how you get to work.
When asking for permission, explain:
Why you need the car. Work commute, caring responsibilities, lack of public transport.
The type of car you are considering.
The expected monthly payment.
Practical, affordable choices strengthen your case. A modest used hatchback looks very different from a £30,000 SUV.
If your DMP is complete, you do not need permission. You apply like any other bad credit applicant.
Can You Get Car Finance During an Active DMP?
Yes, but usually through specialist finance partners.
Mainstream high-street finance partners tend to avoid active DMP applications. Specialist finance partners look deeper. They assess your situation rather than just your credit score.
Here is what they actually care about:
1. Affordability
After your DMP payment, bills and living costs, how much genuinely disposable income is left?
The finance payment must fit comfortably. If it is tight, approval becomes difficult.
2. Your Credit File
The DMP and any past defaults will be visible. Lenders expect that.
What they are looking for is not perfection. It is stability since the DMP began.
3. Your DMP Payment History
Consistent, on-time payments are a strong positive signal. They show structure and responsibility.
4. Time on the DMP
The longer you have been paying reliably, the stronger your case becomes.
5. The Car Itself
This matters more than people realise.
A lower-value, practical car improves approval chances. High-value or high-depreciation cars reduce them significantly.
This is not the time to aim aspirational. Think practical.
HP vs PCP on a DMP
During an active DMP, Hire Purchase is usually the realistic option.
HP focuses heavily on affordability, meaning what you can pay monthly, rather than credit scoring alone.
PCP is harder to access because it relies more on credit profile strength. Leasing is usually off the table altogether.
For most DMP applicants, HP is the workable route.
Car Finance After a DMP. What Changes?
Once your DMP is complete, things shift meaningfully.
You no longer need provider permission.
Your disposable income improves once DMP payments stop.
Some mainstream finance partners may begin to consider you over time.
Here is how it typically plays out:
Immediately after completion, you will likely still need specialist finance partners.
Two to three years later with a clean history, better rates may become available.
After six years, the DMP drops off your credit file entirely.
Time helps, especially if everything since completion is clean.
How Does a DMP Affect Your Credit Score?
A DMP itself does not appear as a standalone entry.
What appears are the accounts included in the plan and any defaults or missed payments that happened before it.
In most cases, the credit damage happened before the DMP began. The DMP is often the fix, not the cause.
Making consistent payments over time gradually rebuilds your profile.
An older DMP with no recent issues tells a very different story from a recent one with ongoing missed payments.
Structure matters. Lenders who specialise in this space understand that.
What Car Should You Apply For on a DMP?
Think sensible and affordable.
The sweet spot tends to be:
Used cars 8 to 10 years old
Under 100,000 miles
Reliable, mainstream models
Cars like the Ford Focus, Vauxhall Astra, or Volkswagen Polo often make sense. They are practical, hold value reasonably well, and look responsible on paper.
A deposit, if you can manage one, reduces the finance amount and improves approval odds.
The mindset here is simple. Practical, not aspirational.
DMP vs IVA. Why It Matters
Both affect your credit file, but they are not viewed equally.
A DMP is informal and not insolvency.
An IVA is formal insolvency and recorded as such.
That difference usually means more options and slightly greater flexibility for DMP applicants.
How to Apply for Car Finance on a DMP
If you decide to explore your options, the process is straightforward:
Complete a short online application using a soft search only. There is no impact on your credit file.
Lenders assess your affordability and payment history.
If approved, you can choose a car from any approved UK dealer.
You are not tied to one dealership. You find the right car for your situation.
The goal is not a perfect rate.
It is a workable one.
FAQs
Can I get car finance while on a DMP?
Yes. Usually through specialist finance partners, and you will need permission from your DMP provider if it is still active.
Do I need permission?
Yes, if your DMP is active. No, if it is complete.
Will a DMP stop me getting finance forever?
No. Over time, especially after completion, your options improve.
How long does a DMP stay on my file?
Six years from when it was set up.
Is HP or PCP better?
HP is typically more realistic during an active DMP.
Does a DMP show on a credit check?
The DMP itself does not appear as a separate marker, but the accounts included in it will show.
If you are on a DMP and need a car, you are not automatically ruled out.
It comes down to being realistic, getting permission if required, and choosing something affordable.
Yes, you can get car finance with an IVA in the UK.
It isn’t straightforward, and timing matters more here than with many other credit issues. For most people, the outcome depends on whether the IVA is still active or has been completed, whether you have permission from your insolvency practitioner, and whether the proposed repayments are genuinely affordable.
A common assumption is that an IVA rules out car finance completely. That isn’t quite true. While options are limited, some specialist finance partners will consider IVA car finance applications both during and after an IVA, as long as the right conditions are met.
What Is an IVA and Why Does It Affect Car Finance?
An Individual Voluntary Arrangement (IVA) is a formal, legally binding agreement to repay debts over a fixed period, typically five or six years. It’s closely monitored, which is why finance partners view it differently from other credit issues.
From a car finance perspective, an IVA raises two immediate questions for finance partners:
Whether you’re legally allowed to take on new credit
Whether repayments would be affordable alongside your existing IVA commitments
Because an IVA controls how your disposable income is used, finance partners are cautious about adding new monthly obligations. This is why IVA car finance applications require careful assessment, particularly while the arrangement is still active.
This differs from other serious credit issues, such as car finance after bankruptcy, where the legal framework changes once discharge has taken place.
Can You Get Car Finance While in an IVA?
Yes, car finance while in an IVA is possible — but it requires permission and comes with restrictions.
While your IVA is active, you’ll need written permission from your insolvency practitioner before taking on new credit. That permission isn’t automatic. Your insolvency practitioner will assess whether the finance is necessary, affordable, and won’t jeopardise your IVA commitments.
Even with permission, there are practical limits on what’s realistic:
Monthly payments are often capped (commonly around £250, depending on circumstances)
Vehicle choices tend to be practical rather than aspirational
Approval from your insolvency practitioner does not guarantee finance partner approval
The number of specialist finance partners willing to work with active IVAs is small
For many people, finance during an active IVA is possible if the need is genuine and the numbers make sense. An IVA does not stop car finance entirely, but it does make the process more restrictive and involve additional steps.
Car Finance After Completing an IVA
Once your IVA has been completed, things become noticeably easier.
Car finance after an IVA is assessed very differently from finance during an active arrangement. At this stage, finance partners focus less on the IVA itself and more on how you’ve managed your finances since completion.
This includes:
Whether payments have been made on time since completion
Whether income is stable and sustainable
Whether the proposed repayments are affordable
Completed IVA applications are far more acceptable to finance partners, and approval chances improve significantly, particularly once 12 months have passed.
This is similar to how finance partners assess car finance with a CCJ — recent behaviour and context often matter more than the historic issue itself.
How Long After an IVA Can You Get Car Finance?
There’s no fixed waiting period, but time does help.
Some finance partners will consider applications shortly after completion, while others prefer to see more time has passed. When people ask how long after an IVA they can get car finance, the answer depends more on what’s happened since the IVA ended than on the calendar.
Lenders typically look at:
Time since completion
Stability of income
Absence of recent missed payments
Overall affordability
Most finance partners find applications easier to assess once at least 12 months have passed after completion.
What Lenders Look at With an IVA
Lenders assess the full picture rather than one single factor.
Whether the IVA Is Active or Completed
Completed arrangements are far more acceptable than active ones.
Permission From Your Insolvency Practitioner
If the IVA is still active, written approval is required. Without it, finance partners will not consider applications during an active IVA.
Income and Stability
Consistent, provable income matters more than headline salary figures.
Affordability of the Car
Lower payments and sensible terms significantly improve outcomes.
Other Credit Issues on File
If the IVA appears alongside defaults, arrears, or CCJs, assessments become more cautious, though approval may still be possible.
What Types of Car Finance Are Possible With an IVA?
Options are limited, but they do exist.
Hire Purchase (HP): Often the most realistic option, with fixed payments and no large final balance.
PCP: Sometimes available, though criteria are stricter and deposits may be higher.
Guarantor finance: Can reduce finance partner risk in some cases, but isn’t suitable for everyone.
Understanding the differences between hire purchase and PCP options for bad credit early can help avoid wasted applications.
Common Misconceptions About IVA and Car Finance
Many people rule themselves out unnecessarily.
“An IVA means I definitely can’t get finance while it’s active” — it may be possible with permission.
“I need perfect credit first” — affordability and recent behaviour matter more.
“Checking eligibility damages my credit score” — soft searches do not.
Knowing what’s accurate can prevent unnecessary stress.
How to Improve Your Chances of Approval With an IVA
There’s no guaranteed formula, but these steps help:
Get written permission if the IVA is active
Maintain stable income
Choose a modest, affordable car
Avoid multiple hard credit applications
Be accurate and consistent
There are proven ways to improve your chances of car finance approval by approaching the right finance partners with realistic expectations.
Final Thoughts: Can You Get Car Finance With an IVA?
Car finance with an IVA is more challenging than standard finance, but it isn’t impossible.
During an active IVA, approval may be possible with permission and realistic expectations. After completion — particularly after 12 months — options improve significantly.
Rather than guessing or applying blindly, the safest next step is to check eligibility without risking further damage to your credit file.
If you have an IVA (Individual Voluntary Arrangement), you may be wondering whether you can still get car finance. The short answer is yes, but there are some important factors to consider.
Not all finance partners will approve finance for those in an IVA, but there are specialist finance partners who cater to people in this situation. This guide will explain how an IVA affects your ability to get car finance, what steps to take before applying, and how to improve your chances of approval.
What is an IVA and How Does it Affect Car Finance?
An IVA (Individual Voluntary Arrangement) is a legally binding agreement between you and your creditors to repay debts in manageable instalments. It is an alternative to bankruptcy and helps individuals regain financial stability while avoiding legal action from creditors.
However, an IVA does affect your ability to get car finance:
Some finance partners will automatically decline applications from those in an IVA due to the increased risk.
Others are willing to offer car finance but may have stricter requirements, such as higher deposits or proof of stable income.
You may need permission from your IVA supervisor before taking on new credit, including a car finance agreement.
If you are still in an IVA, the most important thing to do before applying for car finance is to speak to your IVA provider to understand your options.
The short answer is yes, but there are conditions.
Lenders that accept applications from people in an IVA will assess:
✔ IVA Supervisor Approval – You may need written permission before applying. ✔ Stable Income – You must prove that you can afford repayments without defaulting on your IVA. ✔ Proof of Financial Stability – Making regular IVA payments without delays improves approval chances.
Tip: Contact your IVA provider first to confirm whether you are eligible to take on new credit. Some IVAs restrict new borrowing without prior approval.
Steps to Apply for Car Finance with an IVA
If you are in an IVA and need a car for work, family commitments, or essential travel, here are the key steps to follow:
Step 1: Get Permission from Your IVA Supervisor
Some finance partners will not consider applications without written approval from your IVA supervisor. This is often the first requirement, so check with them before applying.
Step 2: Check Your Credit Report
Even if you are in an IVA, checking your credit score is important. Some finance partners will offer better rates if you have shown financial stability, such as keeping up with IVA payments.
Request a free credit report from Experian, Equifax, or TransUnion.
Look for any errors and correct them before applying.
Avoid unnecessary hard credit checks, as they can lower your score.
Step 3: Compare Lenders Who Accept IVA Applicants
Not all finance partners will approve car finance for those in an IVA. To improve your chances:
Look for finance partners who specialise in bad credit and IVA car finance.
Use a broker or comparison service to find the best available deals.
Avoid applying to multiple finance partners at once, as this can harm your credit score.
Step 4: Apply Through a Soft Search to Protect Your Credit
A soft search allows you to check which car finance options are available without affecting your credit score.
Check your eligibility now with Motorly’s car finance tool and find out what options are available to you.
Common Mistakes to Avoid
Applying for multiple loans at once – Too many applications in a short period can harm your credit score.
Not checking your credit report for errors – Incorrect information can impact approval chances.
Skipping the IVA approval step – If your IVA supervisor does not approve new credit, your application may be declined.
Applying without comparing finance partners – Some finance partners specialise in IVA car finance and may offer better rates.
Avoiding these mistakes can increase your chances of approval and help secure a finance deal that works for your budget.
Final Summary: Can You Get Car Finance with an IVA?
✔ Yes, but you need IVA supervisor approval before applying. ✔ Some finance partners specialise in IVA-friendly car finance, while others may automatically decline applications. ✔ A stable income and strong repayment history can improve your chances of approval. ✔ Using a soft search tool can help you compare finance partners without affecting your credit score.
Ready to explore your options?Check Your Finance Eligibility Now and find out which finance partners may approve your application—without affecting your credit score.
Navigating car finance can be challenging, especially if you’re currently in an Individual Voluntary Arrangement (IVA). Many people assume that being in an IVA automatically disqualifies them from obtaining car finance, but the reality is more nuanced. We’ll explore your rights regarding car finance during an IVA and offer practical advice to help increase your chances of approval.
What Is an IVA and How Does It Affect Your Finances?
An IVA, or Individual Voluntary Arrangement, is a legally binding agreement between you and your creditors to pay off your debts over a fixed period, typically five to six years. It’s a popular solution for those struggling with unmanageable debt, as it allows you to make affordable monthly payments based on your financial situation. However, being in an IVA does impact your credit score, making it harder to access credit, including car finance.
When you’re in an IVA, your finances are closely monitored by an insolvency practitioner (IP). This professional is responsible for managing your IVA, ensuring that you stick to the agreed payment plan, and that any new financial commitments are affordable. While an IVA does restrict your access to credit, it doesn’t completely close the door on obtaining car finance.
Can You Legally Apply for Car Finance During an IVA?
The short answer is yes, you can legally apply for car finance while in an IVA. However, there are conditions you must meet. The most crucial step is obtaining approval from your insolvency practitioner (IP) before you apply. Your IP needs to confirm that the new finance agreement is affordable and will not jeopardize your ability to make your IVA payments.
Legally, nothing prevents you from seeking car finance during an IVA, but it’s essential to proceed with caution. The new finance agreement must be sustainable within your current budget. If your IP approves and the finance partner is willing, you can proceed with your application.
Your Rights When Seeking Car Finance in an IVA
It’s important to understand that you have rights when applying for car finance during an IVA. Knowing these rights can empower you to make informed decisions and protect yourself from unfair practices.
Right to Apply – You have the right to apply for car finance, provided you can afford the repayments and have obtained approval from your IP.
Right to Transparent Terms – Any finance partner you approach must provide clear and transparent terms. You should fully understand the interest rates, fees, and repayment schedule before signing any agreement.
Right to Protection – As a consumer, you are protected from unfair or predatory lending practices. This means that finance partners cannot take advantage of your financial situation by offering unfavourable or exploitative terms.
Right to Informed Consent – You have the right to be fully informed about how taking out car finance might impact your IVA and overall financial health. Your IP should provide guidance on this.
How to Increase Your Chances of Approval
Getting car finance during an IVA can be challenging, but it’s not impossible. Here are some practical tips to help you increase your chances of approval.
Choose the Right Lender – Not all finance partners are willing to work with individuals in an IVA. Focus on finance partners who specialize in bad credit or IVA car finance. They are more likely to understand your situation and offer suitable terms.
Demonstrate Financial Responsibility – Lenders will want to see that you’re managing your finances responsibly. This means keeping up with your IVA payments, maintaining a budget, and avoiding any new debts.
Consider a Co-Signer – If possible, having a co-signer with a stronger credit history can improve your chances of approval. This person agrees to take responsibility for the loan if you’re unable to make payments.
Prepare Your Documentation – Before applying, gather all necessary documents, including the approval letter from your IP. This shows the finance partner that your application is serious and that your IP has approved the finance.
How Motorly Can Help You Navigate IVA Car Finance
At Motorly, we understand the challenges of securing car finance during an IVA. That’s why we’ve partnered with a large panel of finance partners who specialize in IVA car finance. Our team is experienced in finding finance solutions tailored to your needs, even if you’re currently in an IVA. We’ll guide you through the process, from obtaining the necessary approvals to finding the right car finance deal.
Getting car finance during an IVA may seem daunting, but with the right approach and understanding of your rights, it’s entirely possible. By working with specialized finance partners and maintaining open communication with your insolvency practitioner, you can secure the car finance you need without jeopardizing your financial recovery. If you’re ready to explore your options, contact Motorly today. Our team is here to help you every step of the way.
If you’re currently in an “individual voluntary arrangement” or IVA, you may be wondering if you can still get car finance. While it may be more difficult, it is not impossible, but your credit records will certainly play a crucial role in the finance partner’s decision-making process.
An IVA is a contract between a person and their finance partners via a third party, usually when they’re having difficulty paying off their debts. They’ll be given a chance to repay their debts through regular instalments over a certain period. Repayments need to be completed within a specific time frame, and once the IVA is completed, it will be removed from the Individual Insolvency Register after three months. However, it will take six years for the IVA to be removed from your credit report starting from the date the agreement began.
Despite having an IVA, you can still apply for car finance, although finance partners may consider you a high-risk borrower. They may reject your application or offer deals with higher interest rates. Therefore, it’s important to improve your credit score before applying for car finance to increase your chances of getting approved.
Once you’ve completed your IVA, it will appear on your credit report, and car finance companies will check it when you apply for financing. Seeing an IVA on your credit history may give the impression that you’ve had difficulties keeping up with your repayments in the past. However, this does not automatically mean your application for car finance will be rejected. Some finance partners may see the IVA as your way of becoming a more responsible borrower by taking the necessary steps to settle your debts with other creditors.
Here are some steps you can take to improve your credit score:
Register to Vote: If you’re not registered on the electoral roll yet, it’s crucial to do so as it can significantly affect your chances of acquiring car financing. You can register online through gov.uk.
Check for Errors on Your Credit Report: Ensure that the details on your credit report, such as your name and address, are accurate. If you spot any errors, report them immediately to the credit reference agency so they can be corrected.
Check for Any Suspicious Transactions: Look at the transactions on your credit report, and if you see something that’s not quite right or unfamiliar, it could be a fraudulent transaction. Report it immediately to the credit reference agency.
Pay Bills on Time Every Time: Paying your utility bills, phone, internet, and credit card bills on time can significantly improve your credit score. Set up reminders to ensure you don’t miss any payments.
Pay Off Your Existing Debt: Although no rule says you can’t get car finance with an IVA, it’s best to pay off your existing debts first. Once you’ve completed the IVA and have become more responsible with your finances, you’ll have a better chance of being approved for car finance.
If you want to get car financing with an IVA, you’ll need to talk to the Insolvency Practitioner. They will want to know why you need a car, such as if you need it to get to work. While having an IVA may make it more challenging to get approved for car finance, it’s not impossible. Improving your credit score and showing you’re a responsible borrower will increase your chances of getting approved.
Interested to learn more? Check out our IVA Car Finance page
