IVA Car Finance Guide

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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By Justin Cottrell

Justin has been involved within the financial services sector since 1995. He established Media Maze, a small boutique marketing agency back in 2004. Working with brokers and lenders of all sizes. In October of 2018 Justin went on to launch a car finance brokerage called Motorly. Utilising the knowledge from the experienced team he built at Media Maze Motorly has gone from strength to strength, Twitter: @wearemotorly Facebook: wearemotorly