If you’re in an Individual Voluntary Arrangement (IVA), getting car finance is harder but not always impossible. The most important step comes before any application: checking what your IVA allows. This guide explains the borrowing rules most IVAs include, how lenders view IVA applicants, and what changes once your IVA ends.
In short
Most IVAs don’t let you take on new credit above a set limit, often £500, without your IVA supervisor’s permission. So in most cases you’ll need your supervisor’s consent before applying for car finance. Taking out finance without it could breach your IVA and put the arrangement at risk.
Can you get car finance while in an IVA?
It can be possible, but the terms of your IVA come first. Most IVAs restrict new borrowing above a set amount, commonly £500, unless your supervisor agrees in advance (PayPlan). Your own limit is in your IVA proposal, so check the paperwork or ask your supervisor.
A supervisor is more likely to consider a request where a car is genuinely needed, for example to get to work, and where the payments are affordable without reducing what you pay into your IVA. Some supervisors may agree to replacing an existing hire purchase agreement, for example.
If you take out finance without permission, your supervisor could treat it as a breach. That could cause the IVA to fail, which would remove its protection from your creditors and could, in some cases, lead to bankruptcy (GOV.UK).
What lenders look at for IVA applicants
Most mainstream lenders won’t lend during an IVA. Some specialist lenders will consider it, and they usually look at:
- Whether your supervisor has given written consent
- Affordability: whether you can manage the car payments alongside your IVA payments and essential bills
- How far through the IVA you are, and your record of keeping up IVA payments
- Your income and how stable it is
- Your deposit, if you have one
Expect higher interest rates than for applicants with good credit. Compare the total amount payable carefully.
How an IVA affects your credit file
An IVA is recorded on your credit file for six years from the date it starts. If it lasts longer than six years, it usually stays until it ends (PayPlan). Separately, it’s listed on the public Individual Insolvency Register, and it’s removed from that register three months after the IVA ends (GOV.UK).
While it shows on your file, most lenders will see you as higher risk. You may be declined or offered higher rates.
Car finance after your IVA ends
Once your IVA is completed, ask your supervisor for a completion certificate and check that your credit files show the IVA as completed. Lenders will still see it until it drops off your file, but a completed IVA followed by on-time payments looks better than an active one.
If your IVA fails, your creditors can take action again, and getting finance becomes much harder.
To rebuild after an IVA, register on the electoral roll, keep up all existing bills, and consider a small, manageable credit product that you repay in full each month.
Alternatives if finance isn’t suitable
- Speak to your supervisor first. They can tell you what’s allowed and may help you work out what’s affordable.
- Buy a cheaper car with savings, if your IVA allows you to keep them.
- Get free debt advice from StepChange, MoneyHelper or Citizens Advice before making any decision.
IVA car finance FAQs
Do I have to tell the lender I’m in an IVA?
Yes. You must answer application questions honestly. The IVA will show on your credit file in any case, and giving false information on a credit application can have serious consequences.
Does my IVA supervisor need to approve car finance?
In most cases, yes, if the amount is over the credit limit set in your IVA, which is often £500. Check your IVA terms and get consent in writing before you apply.
Can I get PCP while in an IVA?
Some specialist lenders may consider it, but PCP’s large final payment can make it harder for your supervisor to approve, because it creates a big future debt. Hire purchase is often simpler to assess.
Can I keep my current car in an IVA?
Often, yes, if you need it and it isn’t worth a lot. Your IVA proposal sets out what happens to valuable assets, so check with your supervisor.