Can you get car finance with an IVA?

A common concern people have when considering an IVA is whether it affects their chances of getting a car on finance. Being in one should not mean you cannot get approved for a car loan, and our guide is here to help you through the process.

What is an IVA?

An IVA is a common term for an individual voluntary arrangement which is a legally binding agreement between you and your creditors. It lists how and when you pay them back for your debts. The amount can be paid all at once (known as a lump sum IVA) or over a period of time that you both set.

Getting an IVA can be a good short-term solution if you have some debt, as you can write off unaffordable debt and begin rebuilding your credit score.

Does an IVA affect my credit rating?

An IVA is a legally binding document and will be recorded on your credit report. Since your credit score is tied to the various ways you use your credit, it usually goes down as a result of an IVA. Depending on where it began, the lowered score may cause you to face difficulties when borrowing money or trying to finance a car.

Why does this happen? An IVA reduces your chances of getting credit because it shows you may have had repayment issues in the past. When a new lender looks at your credit history, such as the time you applied for a mortgage, different car finance, or a loan, they’ll use the information they have to figure out if you’re likely to pay them back on time or at all. Applying for an IVA in the first place may signal you as a high-risk customer, and they may reject your car finance application or charge you a high interest rate.

But an IVA won’t stay on your credit report forever – just six years starting from the approval date. If you finish paying your IVA earlier that time, it will still be reflected on the report but marked as “complete”. Getting car finance after IVA will be much easier.

How to get car finance while on an IVA

You have a few options under IVA car finance, and the first step in all cases is obtaining permission from your Insolvency Practitioner (IP). This person was assigned to your case as you pay off the IVA, and they look over any other loans you apply for, including car finance. Your IP decides whether your request is reasonable under your circumstances (income level, other expenses). After looking at your debt, they can determine if you have enough left over for your car’s monthly payment. Once they approve, it’s time to look for lenders.

Since the IVA will be recorded on your credit history, some creditors may be more cautious about lending to you. However, there are bad credit car finance options available to customers like you. Taking out a new credit agreement such as car finance may be difficult with poor credit, but it’s not impossible. In fact, being in an IVA tells creditors that you are committed to resolving past credit issues.

Approach various lenders to find a few who align with what you are looking for. There are lenders who are experts in getting car finance with IVA – these specialists are people who can walk you through the process.

Can I keep my car on finance on an IVA?

If you already have car finance and are looking to get an IVA, your IP can answer questions based on your unique circumstance. The main factors they are interested in are how you paid for the car and what kind of car it is. Depending on your response, they may suggest keeping your car on finance or trading it in for a cheaper vehicle and use the monetary difference to help finance your other loans.

Carplus reviews

Need a hand?
We're ready to help


Alpha House, Regis Road, London, NW5 3EW


0203 389 7779


Business hours

Monday to Friday 8am - 8pm
Saturday to Sunday 9am - 6pm