IVA Car Finance Guide
What is an IVA?
If you are already in an IVA you can jump to the next section
Many people in England are struggling with their debt, once it reaches the stage where their debt is unmanageable an IVA could be the best route to financial freedom. IVA’s are generally available to those who have over £6,000 or more in unsecured debt. Once you enter into an IVA you will be assigned an insolvency practitioner (IP) who will communicate and negotiate with your creditors.
You will then make one monthly payment to your IP who will manage paying your creditors.
An IVA usually lasts between 5-6 years, once your IVA ends you will be free of all your debts.
Impact on you credit score.
On entering your IVA it will be listed on your credit file for 6 years. During this time you will be unable to get credit without the permission of your IP
You should consider whether taking out finance for a new car is absolutely necessary whilst in an IVA.
However should a new car be essential for commuting or schools runs your IP may grant permission for you to take out additional finance.
The amount of finance your IP would be willing to approve, will very much depend on your circumstances, such as income, outgoings and whether you have kept to the terms of your IVA so far.
Where can I get Car Finance whilst in an VA
As we have covered, being in an IVA lowers your credit score, therefore it is important you look for car finance in the right places.
Buying a car on finance can be a stressful period for some people, but with the added factor of being in an IVA it can be difficult to know where to begin your search.
At Motorly, we have many different lenders, some of whom will approve applicants for car finance in an IVA
Can I buy any car with IVA Car Finance
In theory yes, although it is unlikely your IP would approve anything they deem excessive. The best approach is to get a quote before approaching your IP. This way, you can provide the IP with your monthly payments and they can confirm if this is affordable.
Remember it’s not only the cost of the car you need to budget for, for insurance, tax and maintenance costs will be higher for more desirable cars.
So in summary, we have learnt it is possible to get car finance whilst n IVA we have also learnt that the cost of borrowing whilst in a IVA is much higher and you should seriously consider whether the purchase is essential.
Keep an eye out for our next article where we list the best cars to finance whilst in an IVA.
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