Car finance after an IVA

Can you get car finance after an IVA?

Yes. There are lenders that consider people who have completed an IVA.

Each sets its own criteria. Completing an IVA does not bar you from car finance.

While the IVA shows on your credit file, lenders who check it will see it, and the lenders who consider people rebuilding after a debt solution may be specialists rather than high street names.

What types of car finance are there?

The main routes are hire purchase or conditional sale, where you pay monthly and own the car at the end; PCP, where lower monthly payments are balanced by a larger optional final payment; a personal loan used to buy the car outright; and leasing, where you never own the car. With hire purchase and conditional sale, the lender owns the car until the final payment.

Which fits depends on your budget and how long you keep cars, and each lender decides which products it offers you.

What lenders check

Every lender sets its own criteria, and no lender publishes a simple pass mark. Lenders who consider people rebuilding after a debt solution look at your current income, employment and outgoings rather than your score alone.

They will want to see the IVA recorded as completed on your credit file, not active, and a monthly payment that fits comfortably. Time in your job, time at your address and being on the electoral roll are also part of the picture.

What helps your application

• A deposit: it reduces the amount you need to borrow.
• An on-time record: a record of on-time payments helps any application.
• An accurate credit file: check that all three credit reference agencies show the IVA as completed, with the right dates, and every included debt as settled or partially settled with a zero balance.
• Your completion certificate: some lenders ask for it, so keep it somewhere easy to find.
• Checking your own credit reports before you apply helps you avoid declines and unnecessary hard searches.
• Honest affordability: be ready to show the payment fits comfortably. That's the core test.

Getting your file ready before you apply

Check your reports with all three credit reference agencies, Experian, Equifax and TransUnion. Each must give you your statutory credit report free of charge.

Make sure the IVA is recorded as completed with the right dates, and that the debts inside it show as settled or partially settled with a zero balance. If the IVA is wrongly showing as active, you have the right to dispute it with the agency and get it corrected.

A full application leaves a hard search on your file, and several in a short period can count against you, so avoid applying to lots of lenders at once.

While your IVA is still running

Your IVA's terms usually require your supervisor's written consent before you take on new credit above a set amount, and going ahead without it can put your IVA at risk. Come back when your IVA has finished.

Watch out for

• 'Guaranteed car finance': no responsible lender can promise approval.
• Applying to lots of dealers at once and stacking up hard searches.
• Stretching to a payment that doesn't comfortably fit: affordability is a key test.
• Forgetting who owns the car: with hire purchase or conditional sale, the lender owns it until the final payment.

How AfterMy fits in

We work with a panel of lenders and partners, not the whole market. Our guide to what happens to your credit score when your IVA completes explains the rest of your credit file.