Car Finance With An IVA: What You Need to Know
Whether active or discharged, it’s possible to get car finance with an IVA (Individual Voluntary Arrangement). However, you’ll need to pass affordability checks, get your IVA supervisor’s permission in writing, and find the right lender. Kandoo Car Finance can help with IVA car finance, thanks to a panel including lenders that consider IVA applications.
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Can I get car finance while I am in an active IVA?
Yes, you can get car finance while in an active IVA, but you’ll need written permission from your IVA supervisor before taking on credit above your IVA threshold. This is usually £500, but you should check your own agreement to confirm the amount. You’ll also need a lender willing to work with IVA customers.
Rather than applying to lenders individually and risking repeated declines, using a bad credit car finance panel gives you access to car finance companies that accept IVA applications. This is because most mainstream lenders automatically decline IVA applicants, but specialist lenders base their decisions on affordability and recent financial behaviour.
These lenders are also more likely to accept applications for car finance with a CCJ and other forms of bad credit.
Do I need my IVA supervisor's permission?
In almost all cases, you’ll need your IVA supervisor’s permission to get car finance with an IVA, so you don’t breach your agreement. Approaching your supervisor is worth doing with a clear case. If the vehicle is needed for work, for example, your request is more likely to be accepted.
You should also specify the monthly cost and how it sits alongside your existing IVA payments. This will prove that the financial commitment doesn’t affect your ability to maintain the arrangement.
What about HP car finance with an IVA?
Hire Purchase car finance usually works best for IVA customers, because the lender retains ownership of the vehicle until the final payment is made. This added security makes lenders more likely to consider higher-risk applicants, such as those with an IVA.
Personal Contract Purchase (PCP) works differently. The payments are lower, but the agreement is based on the car’s projected future value. As a result, the outstanding debt at the end is larger. This is known as a residual value model, and it adds complexity that most lenders are not willing to take on for IVA customers.
Car finance with an IVA and defaults
Having defaults on your file and an IVA makes approval harder, but specialist lenders are used to seeing complicated credit histories. What matters most is whether your situation has stabilised and your overall financial situation.
How long after an IVA can I get car finance?
An Individual Voluntary Arrangement (IVA) usually runs for five or six years. Once you make your final payment, your IVA is discharged. A discharged IVA releases you from your remaining unsecured debts. After discharge, an IVA remains visible on your credit file for six years from the date it was registered.
Car finance after an IVA is possible, and you don’t need to wait for the IVA to disappear from your file. Because recent behaviour matters more than the historic record, many people access car finance within 12 to 24 months of discharge using specialist lenders. Improving your credit score after an IVA also helps to strengthen your position.
How Kandoo can help
When you apply through Kandoo, you fill in a short online form, and your profile is matched against a specialist panel of lenders, including those who work with IVA customers.
This stage involves a soft credit check, so checking your options has no impact on your credit score. It also does not affect your existing IVA.
If a lender can help, an adviser will be in touch to talk through your options. You only move to a full application and a hard credit check if you choose to continue with the car finance.
Check if you qualify for car finance in minutes, with no impact on your credit score.
Common questions about IVA car finance
Yes, car finance is possible with an active IVA and after discharge. You’ll need written permission from your IVA supervisor if it’s still active, as well as a specialist lender that accommodates IVA customers. A broker panel is the most effective way to find lenders without leaving a mark on your credit file.
Yes, specialist lenders assess affordability and recent financial behaviour rather than applying automatic exclusions. The key steps are obtaining your IVA supervisor’s permission in writing before applying and using a broker who helps match you with the right lenders.
The IVA record stays on your credit file for six years from the approval date, but specialist lenders base decisions on income stability and recent behaviour rather. As a result, many people with an IVA can access car finance within 12 to 24 months of discharge.
If your vehicle is essential for work, you can usually keep your car on finance while on an IVA. Your payments will need to be affordable, however, and you’ll need written permission from your insolvency practitioner.
Specialist lenders are most likely to accept IVA car finance applications, but the lenders available to you will depend on your circumstances. A broker panel is usually the best approach, as they match your profile to the car finance companies that accept IVA applications.