IVA Car Finance & Loans

An IVA can feel like a barrier to obtaining car finance or other credit agreements. However, having an IVA doesn’t have to stop you from getting approved for car finance deals. We run through exactly what an IVA is and how it can affect your application for car finance below.

What is an IVA?

An Individual Voluntary Agreement (IVA) is a formal agreement between yourself and creditors to allow you to pay off any debt that you owe. This is done in a way that you can afford and could be a one-off sum or spread over a period of time.

Can I get Car Finance with an IVA?

While being on an IVA shows that you are able to pay off your debts and can meet scheduled repayments it can still be hard to get new credit deals, like car finance. We understand that this doesn’t stop you from needing to drive and you can still apply for car finance with ChooseMyCar.

We will need to see a letter from your IVA supervisor however to confirm that any new agreements won’t put you at further risk.

As experts in bad credit car finance for used cars, we are here to help you with getting behind the wheel of a car, even if you have an IVA or a CCJ. Our expert team will help match your repayment plan to what you can afford.

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Frequently Asked Questions

While you won’t need a good credit score to flat out buy a car, it can affect things if you want to get car finance. Overall the better your credit rating the better deal you’ll get on your car finance.

A poorer credit score may mean you are either denied car finance altogether by some lenders or else face higher interest rates or monthly repayments. That shouldn’t put you off though, at ChooseMyCar we are experts in bad credit car finance and can even help people with CCJs or IVAs get car finance. For more information on raising your credit score, check out our guide.

The amount you can afford to spend on a car will vary depending on your situation. The important thing is to make sure you can afford any repayments that your car finance agreement sets out. Missing repayments can cause issues between you and your lender and could end up in court or affecting your credit rating. 

To work out what you can afford, try our car finance calculator.

Your car finance may have been refused for a number of reasons. These are generally one of the following: 

  • Poor credit history or a bad credit score - read our tips on improving your credit score
  • You don’t meet the criteria for qualifying for that lender’s finance
  • Your employment status - some lenders won't approve you if you are unemployed or self employed
  • Type of driving license
  • Age - this could be because you're too old or a young driver. 

For more information on why you may have been declined, please read our guide on being refused car finance.

The length of a car finance agreement will vary for a number of reasons. The overall length of a term is usually measured in 12 month increments. 

These terms usually start with a minimum of 24 months (2 years) upt to a maximum of 96 months (8 years). Generally terms for used cars are shorter than those for long cars. 

While the monthly repayments will likely be lower on a longer term plan, it’s worth working out how much interest you’ll pay if you opt for something over a longer period of time.

It is possible to get car finance with bad credit. Many lenders provide loans and finance options specifically for people with bad credit.

Personal loans can be a great car finance option if you have bad credit. And a guarantor loan may help you avoid higher interest rates; this is where a friend or family member co-signs the loan, agreeing to meet payments if you're unable to.

With pre-approval on a personal loan, you can walk into the dealership like a cash buyer. You can be in a better position to negotiate on price. And you can avoid the stress of the finance office.

Your credit file is checked if you apply for car finance. And you'll usually have to provide proof of ID, address, and income. The specific documents you'll need ultimately depend on the finance provider you go with.

Providers will check your credit score when you apply - initially via a soft search. They'll perform a hard credit check if you choose to enter into a contract with them. Most lenders will need to see your driving licence - full or provisional. You may also be asked to provide:

  • Your passport - for proof of ID
  • Utility bills or council tax letters - for proof of address. These usually need to be dated within the last three months.
  • Payslips - for proof of income and to make sure you can afford the payments. Some providers may ask to see a few months' worth.

While it’s not ideal, there are circumstances that may occur that stop you from making a payment.

If you are unsure about your ability to make an upcoming payment we would recommend contacting your lender. This way there may be something that can be worked out before the payment is missed.

If you’ve already missed your payment, and can afford to make it, contact your lender as soon as possible to make the payment. You may incur a late fee, but making the payment can stop anything else from having.

If you continue to miss payments there is a chance your car could be repossessed and you will still owe for missed payments. Your credit rating will also be negatively affected.

A guarantor is someone that will meet payments if you miss one. They are usually a parent, but can be anyone not directly linked to you financially, i.e. you can’t have a joint account with this person.

Read our guarantor loan guide.

Having a guarantor can help you to get a loan when you otherwise may not have been able to, i.e. when you are a young driver, self employed or have bad credit.

Lenders may look more kindly on someone in one of these situations if they have a guarantor so they know that there’s less chance of a missed payment.

Read our guarantor loan guide.

County Court Judgements may affect your chances of being approved for car finance, however it won’t definitely stop this. As experts in car finance we may be able to help those on CCJs that want to apply for car finance.

For more information read our full guide on CCJs and car finance.

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