IVA Car Finance: How it works

To start

People have many options when it comes to getting IVA car finance. But there are also many drawbacks. Many customers see having an IVA as a big obstacle to securing any car finance and often dismiss the possibility altogether. Despite these setbacks, for example, having a bad credit score or no guarantor, customers can still get cars on finance. It may just prove to be a bit more difficult. 

This blog will broaden your understanding of car finance with an IVA. Our aim is to help dispel myths about IVA car financing and to help you gain clarity about it. Below you can read about how getting car finance with an IVA is achievable. 

Getting IVA car finance

Before you apply for Individual Voluntary Agreement (IVA) car finance, you will need to consider a few things. You and your creditors must follow this repayment plan over a period of time if you have an IVA. Paying for credit through an IVA with monthly payments typically lasts between 5 and 6 years. It may be difficult to get accepted by a lender if you have an IVA, but it isn’t impossible. You’re not supposed to get any further credit while in an IVA without your IVA supervisor’s permission. This typically needs to be in writing. Luckily, your IVA supervisor is there to make sure you don’t enter any new financial agreements that may harm your credit rating. Nevertheless, permission could still be granted to you. 

Since an IVA is a legally binding monthly repayment plan, lenders may see this as an attractive attribute when looking at your finances because it proves you are committed to resolving any historical credit affairs. It also shows you can make payments on time and pay off any debts you have. However, it will not guarantee that you will get accepted for IVA car finance and you may still find it difficult. Our specialists work with lenders with experience in dealing with IVAs, to help secure your dream car.

Myths about IVA car finance

There are a number of myths surrounding IVA car finance and we want to reassure you with the facts about IVA car financing. Some of them are:

  • Car finance is not available for those with bad credit or low income. It’s just not true. People are often concerned when they think about getting their first car, how much it will cost them and whether they need a good credit score. It’s true that everyone is eligible for a decent rate, regardless of their financial history or income. At Bad Credit Motor Finance, we believe everyone could get their dream car, for most financial circumstances considered. Whether or not you have an IVA or not, we could help you!
  • Applying for car finance with an IVA will impact your credit score. Similar to applying for any car finance, when applying for car finance if you have an IVA, it should not affect your credit score. Your only concern is whether your IVA supervisor will approve your new credit for car financing.

Your personal circumstances

IVA car finance lenders will want to know about your personal circumstances when you apply. Some of these include:

  • Your income.
  • Your credit score. This number score represents how good your financial history has been. Lenders use this information to see how trustworthy you are at making payments for any credit you borrow.
  • Your debts and assets (i.e., what you owe and what belongs to you). Lenders need to be sure that any debt repayments won’t leave them in a worse position than when they offered the credit – If there is anything that may prevent them from taking on new loans, this information needs to be shared with them!
  • The vehicle itself, its value, and mileage play a crucial role here, as they determine how much interest you will be charged on the loan.

Check your credit score and eligibility and we’ll sort out the rest

  • Check your credit score. See how your IVA may have affected your credit score.
  • Check your eligibility. Has your IVA supervisor approved you for credit? If you’re unsure about any other requirements to meet, get in touch with us. 
  • Use a car finance broker. If you use a car finance broker, we can help you find a good deal on a car loan. To make sure you get the car you deserve, we will take care of all the stressful details involved with financing a car. We work with a panel of lenders to find the right cars for you within your budget through our trusted brokers. 

To conclude

In this guide, we’ve covered the basics of car finance with an IVA. Obviously, your personal financial situation will dictate what you can expect to get. By understanding the details, you can ensure that you will be in a better position. It will help us when it comes to doing all the stressful work for you. If you’re unsure about anything that we’ve discussed in this blog post, please don’t hesitate to contact us directly for more information or check out our site for all-things car finance!