Car Finance with an IVA
If you’d like to buy a used car but you have an IVA, getting finance might seem difficult. While an IVA complicates an application, securing finance is not impossible. ChooseMyCar works with specialist lenders who will look at your circumstances individually and help you to explore options with a quick soft credit check and straightforward, supportive guidance.
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Soft credit check with no impact on your score
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Access to a wide panel of specialist lenders
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Quick decisions with flexible finance options
ChooseMyCar specialises in helping individuals with bad credit secure car finance. As a credit broker, not a lender, we offer a range of finance options tailored to different needs, including popular plans like Hire Purchase (HP), as well as services designed specifically for those with less-than-perfect credit. Our mission is to make car financing accessible for everyone, regardless of credit history. Interest rates start from 8.5% APR. For example, borrowing £9,000 over 60 months with a REPRESENTATIVE APR of 19.9% and no deposit would result in a monthly payment of £229.95. The total interest paid would be £4,797.00, making the total amount payable £13,797.00.
What is an IVA?
An Individual Voluntary Arrangement (IVA) is a formal agreement that helps you repay debt in manageable monthly amounts, usually over five to six years. It’s set up with the help of an insolvency practitioner and is different from bankruptcy. As the name suggests, is a voluntary agreement between you and your creditors to pay back your debts in a way you can afford.
Once an IVA is in place, your repayments are structured and often fixed, helping you take control of your finances in a more predictable way. While it will appear on your credit file for a period of time, it also shows that you’re actively dealing with existing debt rather than leaving it unresolved.
If you’re thinking about financing a car while in an IVA, it can be really helpful to understand the different types of car finance available and how lenders assess affordability, as this can give you a much clearer idea of what options may be realistic for your circumstances.
Can I get car finance with an IVA?
IVAs are arranged when people with difficult finances seek a solution. They may have missed payments, defaulted on loans and may even have CCJs. All this can affect their credit score.
If you have an IVA and a poor credit score, it makes securing finance less certain but it is still possible.
ChooseMyCar works with lenders who specialise in bad credit car finance and understand that situations can improve over time. Rather than focusing only on past difficulties, our lenders look at whether repayments are currently affordable and whether the finance you’re looking for fits comfortably within your budget.
Even with both bad credit and an IVA, there may still be realistic options available, particularly where your income is stable and your finances are being managed consistently.
- How affordable the monthly payments are based on your income
- Whether your financial situation has been stable
- How recent the IVA is
- The overall cost of the vehicle
- Whether a deposit is available
While the terms available sometimes differ from standard finance agreements, many people with an IVA are able to find a solution that works for them.
What is the difference between Car finance during an IVA and after an IVA?
Your car finance options may change depending on where you are in your IVA process. If you’ve completed your IVA, lenders may be more flexible, for example. Some of the differences can be seen in the table below.
| Category | During an IVA | After an IVA |
|---|---|---|
| Lender approach | May be more cautious | More flexibility over time |
| Affordability checks | Reviewed carefully alongside IVA commitments | Still important, but often easier to demonstrate stability |
| Number of options | Can be more limited | May increase as time passes |
| Deposit expectations | Sometimes helpful | May improve depending on circumstances |
| Overall outlook | Focus on manageable repayments | Greater choice possible as finances stabilise |
If you’re unsure where you stand, the ChooseMyCar team can help. We’ll talk you through the options and help you to find a manageable solution.
How long after an IVA can I get car finance?
Some of our customers assume that an IVA will keep them from securing car finance for years after the end of their agreement. This isn’t always true.
In fact, lenders become more flexible and willing to accept your application once an agreement finishes, especially if you have steady finances and your commitments have been maintained. As time goes by, this trust in your finances improves and options will expand.
Completing an IVA successfully is a good demonstration of your money and debt management. This puts you in lenders’ good books so, while not every offer may be available, you might find that some lenders are willing to accept your application from the moment your IVA finishes.
When someone has completed an IVA, lenders will often look closely at how their finances have been managed since. Stability and affordability tend to carry more weight than the IVA itself, especially as more time passes.
What do lenders consider when assessing my application for car finance during an IVA?
Lenders understand that every financial situation is unique. As such, there is no single answer to this question. Frequent considerations include:
- Whether the monthly payments fit comfortably within your budget
- How stable your income has been
- Your regular household commitments
- The overall cost of the car you choose
- Whether a deposit is available
Many specialist lenders are also used to supporting people who have had credit challenges, so the focus is often on finding a balance that feels realistic and affordable.
How APR changes with an IVA?
The main difference you may notice when comparing car finance with and without an IVA is the APR offered. APR (Annual Percentage Rate) shows the total cost of borrowing, including interest and any fees. Because lenders sometimes see IVAs as higher risk, the rates available can vary. This can affect monthly payments and the overall amount you repay, depending on the agreement. Our APR guide can help you explore how different rates can influence monthly costs across a range of budgets, helping you understand what may feel manageable before applying.
*Borrowing a total of £17,500.00 at an APR of 9.90% will cost £370.96 / month
How APR can differ with an IVA
If you have an IVA, the main difference you may notice is the APR offered. APR (Annual Percentage Rate) shows the total cost of borrowing, including interest and any fees.
Because lenders sometimes see IVAs as higher risk, the rates available can vary. This can affect the monthly payment and the overall amount repaid, depending on the agreement.
Our APR guide can help you explore how different rates can influence monthly costs across a range of budgets, helping you understand what may feel manageable before applying.
What is required for car finance with an IVA?
Evidence is required whenever you apply for finance, whether you have an IVA or not. Lenders want you to demonstrate that the repayments fit comfortably alongside your income and outgoings.
You’ll typically need:
- To be aged 18 or over
- To live in the UK
- A regular source of income (employed, self-employed, or benefits)
- A UK bank account
- Proof of address
- A realistic monthly budget
- A vehicle that fits within what you can comfortably afford
These are standard checks for most car finance agreements.
Do I need permission from my insolvency practitioner?
Some IVA agreements include limits on taking out additional credit, so it can be a good idea to check whether permission is needed before applying.
Organisations such as StepChange explain that people in an IVA may need approval from their insolvency practitioner before borrowing over a certain amount, depending on the terms of the arrangement.
If you’re unsure what applies to you, the ChooseMyCar team can guide you through the process, so you feel confident about the next step.
How can I improve my chances of getting car finance with an IVA?
A few simple steps can help when applying, especially where the monthly payments feel comfortable and easy to keep up with.
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Step 1: Choose a car with affordable monthly payments
Picking a vehicle with affordable monthly repayments makes it much easier to secure a car finance agreement. Choose a car with payments you can manage with ease.
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Step 2: Keep up to date with existing commitments
Keep paying your existing payments as reliably as you can. This demonstrates that you’re responsible with your finances.
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Step 3: Consider a deposit
Even a small deposit can help you to reduce monthly payments or improve the options available.
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Step 4: Use ChooseMyCar’s soft credit check to explore your options
Our soft credit check allows you to see what may be available without affecting your credit score. This helps you to see what is affordable before you make a full application.
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What types of car finance can I get with an IVA?
If you have an IVA, the types of car finance available to you are often the same as you might be offered without one. The two most common options are Hire Purchase (HP) and Personal Contract Purchase (PCP).
Both allow you to spread the cost of a car through monthly payments, but they work slightly differently depending on whether you want to own the car at the end of the agreement or keep monthly payments as low as possible.
Hire Purchase (HP) with an IVA
Hire Purchase is a straightforward option where you pay for the car in fixed monthly instalments. Once all payments have been made, the car is yours to keep.
Many people prefer HP because:
- Payments are clear and consistent each month
- There’s no large final payment
- Ownership transfers at the end of the agreement
- It can be easier to budget for over time
HP is often a really popular choice where simplicity and certainty are important.
Personal Contract Purchase (PCP) with an IVA
Personal Contract Purchase can offer lower monthly payments compared to HP, as part of the cost is deferred until the end of the agreement. This is called a “balloon payment”.
At the end of a PCP agreement, you usually have three options:
- Pay the optional final payment to own the car
- Return the car
- Part exchange for another vehicle
PCP can appeal to people who prefer lower monthly payments or like the flexibility of changing their car after a few years.
Car finance with an IVA: pros and cons
When you secure car finance within an IVA, there are many things to consider. Understanding how these pros and cons balance out can help you feel more comfortable exploring your options.
| Pros | Considerations |
|---|---|
| Spread the cost of a car through monthly payments | Interest rates may differ from standard finance |
| Access to lenders experienced with credit challenges | Options can vary depending on circumstances |
| Choose a reliable car without paying the full cost upfront | A deposit can sometimes improve available options |
| Fixed monthly payments help with planning ahead | Vehicle choice may be influenced by monthly budget |
How do I apply for car finance if I have an IVA?
We make applying for car finance through ChooseMyCar as easy and straightforward as possible. Simply follow these steps:
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Check what may be available with a soft search
Start with our quick soft credit check to see which finance options may suit your circumstances. This won’t affect your credit score.
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Choose a car that fits your needs
Browse our range of reliable used cars and find an option that works well for your budget.
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Review the finance options available
You’ll be able to see the agreements clearly, helping you decide what feels most comfortable month to month.
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Complete your application
Provide a few final details so everything can be confirmed and prepared.
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Get on the road in a car that works for you
Once everything is agreed, you can move forward with confidence, knowing the payments feel manageable for your situation.
