Yes, you can get car finance while you are in an IVA, but approval will be much more difficult and interest rates will be higher than usual. Your IVA will usually appear on your credit file, and you may need permission from your insolvency practitioner before taking out finance. The lender will make the final decision.
An IVA limits how you can take on new credit, so you’ll usually need to check with your insolvency practitioner (IP) before you sign your finance agreement. They can confirm whether a new finance agreement is allowed under your IVA. Lenders will then determine whether special rates and terms will apply.
If your arrangement follows the standard IVA terms, you will need written permission from your insolvency practitioner before taking more than £500 in credit. Your IVA may have different terms, so your insolvency practitioner can confirm which restrictions apply.
Lenders will want to understand your current financial position, including your income, existing IVA payments and regular outgoings. Your credit history, affordability and the details of your IVA will all be taken into account. Some are more cautious because your IVA will still appear on your credit file, but specialist lenders may consider applications from people with a poor credit history.
The car itself can also affect your credit options. A more affordable used car may be easier to finance than higher-value makes and models, as the amount you need to borrow is lower.
An Individual Voluntary Arrangement (IVA) is a formal, legally binding agreement between you and your creditors. It allows you to make agreed payments towards your debts, usually over a set period. If you complete the IVA successfully, any remaining debt covered by the agreement is usually written off. This means you will no longer need to repay it.
An IVA is set up with the help of an insolvency practitioner (IP). They must be authorised and regulated, so they have to follow professional and legal standards. IPs look at your recent financial history and work with your creditors to agree a payment plan that suits your situation.
Most IVAs last around 5 or 6 years. While you have one, you’ll need to keep up with your payments and follow the IVA and loan terms. Once your IVA ends, it will be marked as complete. However, it can stay on your credit file for six years from the date it started.
Start by asking your insolvency practitioner for permission to take out car finance. Applying without their approval could go against the terms of your IVA.
Once you have permission, tell us how much you need to borrow and what monthly payment suits your budget. We’ll assess your eligibility and search our lender panel for available options.
The amount available will depend on your circumstances and the lender’s criteria. A lower-priced car, a smaller loan or a larger deposit may give you more options and help keep the repayments affordable.
Yes, you can apply for car finance after your IVA, though your ability to get approved for car finance will depend on how much your credit score has recovered. While the IVA is showing on your report, mainstream finance providers may still decline your application or offer less favourable terms. Once the IVA has been removed from your credit file after six years, you will have access to a much wider range of bad credit car finance solutions and standard products.
You can apply for car finance as soon as your IVA is complete, as there is no set waiting period. You will no longer need permission from your insolvency practitioner to take on new credit. But the IVA usually remains on your credit file for 6 years from its start date. And this will limit your options until it is removed, and the lender will make the final decision.
Your details are usually removed from the Individual Insolvency Register after three months have passed following the completion of your IVA. Still, you typically have fewer choices because your IVA is still recent. Some traditional lenders prefer to see a longer period of stable finances before offering loans.
Your IVA is ordinarily removed from the Individual Insolvency Register 3 months after it ends. The register and your credit report are separate records, so removal from the register doesn’t mean that the IVA has disappeared from your credit history.
After around 12 months of managing your finances well, you should find that more mainstream lenders are willing to look at your application, although this is also not guaranteed. There is no exact point at which approval becomes easier. But it helps if you rebuild your credit score over time.
The IVA car finance process is designed around the same products available to most drivers. The two options you’re most likely to come across are:
Hire Purchase (HP) is the more straightforward option for people who want to own their car at the end. You pay a deposit, then make fixed monthly instalments over a fixed period, usually between two and five years. Once you’ve made all the HP payments, the car is yours.
Because HP car finance spreads the full cost of the vehicle across the agreement, your monthly payments are usually higher than they would be with PCP. However, there is no large final payment to worry about.
Personal Contract Purchase (PCP) is used by people who want lower monthly payments or like changing their car every few years; however, it is less likely to be offered to people with an IVA. Instead of paying off the full value of the vehicle, you cover the difference between its current value, interest, and what it’s expected to be worth at the end of the agreement, plus interest.
PCP may be less widely available while you are in an IVA. The final balloon payment can make future costs less predictable, which may concern your insolvency practitioner or the lender.
Yes, you can apply for either, but there's no guarantee IVA car finance will be available or that you'll be approved for a car loan.
A joint applicant or guarantor could improve your chances, but it won't cancel out your own credit history. Lenders will still look at your finances, your IVA and whether you can afford the repayments while you continue to repay your debts. If your IVA is still active, check with your supervisor first.
You can't get car finance with a genuine 'no credit check', because no FCA-regulated lender is allowed to skip that step, IVA or not. At Carplus, we start every application with a soft search instead, which checks your eligibility without leaving a mark on your file.
That matters more while you're in an IVA, not less. A soft search lets you see realistic options across our lender panel first, so you only go to your insolvency practitioner about finance you're actually likely to get.
You’ll usually need:
Take the time to check IVA car finance options first with a soft search and avoid taking on a legal agreement that won’t work for you later on.
| To apply for car finance you need to | Requirements | Car must meet the following criteria: |
|---|---|---|
| Provide your full name, date of birth, and nationality | Be aged 18-75 years old | Cost between £4,000 and £40,000 |
| Share your recent address history | Pay an initial deposit if the lender requires one | Have no more than 120,000 miles on the clock |
| Confirm your employment status | Receive a monthly income of at least £1,000 | Be no older than 14 years at the end of the finance agreement |
| Show your income and regular monthly outgoings |
Compare and find the best car finance deals quickly and easily even with bad or poor credit. When comparing deals, you can also factor in the part-exchange value of your current car to reduce the overall cost.
Getting a finance quote with Carplus won't affect your credit score, but a hard search will be completed before completion of the deal
No-deposit car finance options are also available. Check your eligibility today with a soft search and find out what you qualify for.
Get your UK car finance decision in minutes. Check your eligibility first. Apply in confidence with Carplus
An IVA completion certificate confirms that you have completed your arrangement and met its terms. Your insolvency practitioner issues it after completing the final checks and closing work.
Actually yes, as long as you keep up with your car finance agreement and IVA payments, you can keep the vehicle. If you start missing finance payments, though, the lender has the right to recover the car under the specific terms of your agreement. If your circumstances change, contact your insolvency practitioner as soon as possible to see what options you have.
Yes, car finance for people with an IVA can be more difficult to obtain. An IVA appears on your credit report and may impact your creditworthiness in the eyes of lenders. It shows you've had previous financial difficulties.
Some lenders may decline your application. Others could offer a higher interest rate, request a larger deposit or limit the amount you can borrow. These effects can continue after your IVA ends if it still appears on your credit file.
Not necessarily. Many people keep their car while they're in an IVA, especially if they rely on it for work or don't have good public transport nearby. The main thing is making sure you can afford both your IVA payments and your car finance. If you fall behind on the finance, the lender may repossess the car, even if your IVA is still in place.
There isn't a fixed amount. The lender will look at your income, monthly bills, deposit and the car you've chosen to work out how much your monthly repayments could be and the total amount payable. After that, they'll make the final decision on how much they're prepared to offer.
There’s no set timeframe, as every lender handles applications differently. Some people get a decision within the day, but others wait a little longer if more checks are needed. An active IVA can also slow things down if you need permission before applying.
Taking out finance without any consent required by your IVA could breach the terms of the arrangement. Concealing a material change in your finances or accepting repayments you cannot afford may also put the IVA at risk.
