IVA Car Finance

If you are currently under an IVA, it can be tricky to get approval for car finance. However, with the right lender you can put a car on your drive not matter what your credit history is, provided you have a stable monthly income.

What is an IVA?

An Individual Voluntary Agreement (IVA) is a formal agreement you make with creditors. You can either make a one-off payment, known as a lump sum IVA, or pay an affordable rate for a longer period, often 5 or 6 years.
The purpose of an IVA is to write off any unaffordable debt you may have and start to rebuild your credit score.

Is an IVA the same as Bankruptcy?

Bankruptcy works differently to an IVA as you voluntarily give up your assets as collateral for the duration, as well as potentially paying off debts over time depending on the agreement. It’s often a shorter process than an IVA, around 12 months, and can be paid off quicker if your income allows.

It’s a different type of debt solution, but has a similar affect on your credit, and therefore your car finance options.

Can you get Car Finance with an IVA?

Having an IVA, or having paid one in the past, doesn’t stop you from applying for car finance, but you’re less likely to be approved by most lenders. Like with any large purchase or personal loan, banks and lenders will look at your credit history before approving or rejecting your application.

We talked recently about getting car finance with bad credit, and how some lenders specialise in finance agreement for people with a bad credit history, or none at all. These same finance providers are more likely to approve you for car finance if you’ve had an IVA in the past.

If you are currently paying off an IVA, you need permission from your insolvency practitioner before you can apply for car finance. Again, if you find the right lender, and have this approval, car finance is still an option.
Paying off a car finance agreement can also help your credit score in the long run. By paying off your monthly repayments on time, your score will naturally improve throughout the duration of the agreement. As most car finance lasts for a few years, this will have a long-lasting, beneficial impact on your credit.

Getting Car Finance after an IVA

Once your IVA has been completed, it remains on your credit file for 6 years after it was approved. Naturally, when the day comes that it is no longer affecting your credit, it becomes much easier to get a car finance agreement.

But 6 years is a long time to wait for your car, and having one gives you more freedom, and access to more job opportunities that can help you pay off any loans or an existing IVA.
When the time comes to finance your next car, use the Match Me Car Finance Calculator to find trusted lenders and thousands of vehicles that will be ideal for you. It also NEVER affects your credit score, so you can find perfect cars and lenders in just a few clicks without ever harming your credit.

Car finance allows you to split the cost of a new or used car into affordable monthly payments. This gives you more choice of cars, while also giving you more control over your finances.