Can I get car finance during an IVA?
While your IVA is active, taking on car finance is tightly restricted, but not always impossible. Here's when your insolvency practitioner might approve it, why hire purchase is almost the only realistic route, and the option most people overlook.
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Written by the AfterMy team · Reviewed by Ben Miller, Customer Success Manager
Last reviewed: June 2026
Can I get car finance during an IVA?
While your IVA is active, taking on car finance is tightly restricted, but not always impossible. Here's when your insolvency practitioner might approve it, why hire purchase is almost the only realistic route, and the option most people overlook.
Free to use, no obligation. A soft search won't affect your credit score.
Written by the AfterMy team · Reviewed by Ben Miller, Customer Success Manager
Last reviewed: June 2026
Quick answer
Sometimes, but only with your insolvency practitioner's written permission, and only if the car is genuinely needed and the payments fit your budget. Mainstream lenders will turn you down; a few specialists consider it, at high rates. For many people, saving up and buying a cheaper car outright works out better. And the day your IVA completes, your options open right up.
On this page
The short version
Car finance during an IVA isn't a flat no, but it's tightly controlled. Almost any car finance agreement is more than £500 of credit, and the terms of your IVA say you can't take on credit above £500 without your supervisor's written permission. So the first step isn't a lender. It's your insolvency practitioner (IP).
Key point
Even with permission, there's a practical hurdle: your IVA shows on your credit file and the public Individual Insolvency Register while it's active, so mainstream lenders and dealerships will almost always decline. Only specialist lenders consider applicants in an active IVA, and they charge high rates to cover the risk.
When your IP might say yes
Your IP's job is to protect the arrangement, not to block you for the sake of it. If a car is genuinely essential, getting to work, the school run, a job that needs you mobile, and the repayments comfortably fit within your budget, there's no reason in principle for them to refuse.
- Is it necessary? A car you need for work is a stronger case than a nicer car you'd like.
- Is it affordable? Most of your spare income already goes into your IVA, so they'll check there's genuinely room for the payments without putting the arrangement at risk.
- Is it sensible? A modest, reliable, cheap-to-run car will get a yes far more easily than an expensive one.
Why it's almost always hire purchase (HP)
During an active IVA, hire purchase is realistically the only type of car finance open to you. The other common option, PCP, ends with a large 'balloon' payment, which doesn't fit well with an IVA budget. HP spreads the full cost over the term, and the car becomes yours with the final payment.
Key point
If you already had an HP agreement when your IVA started, you can usually keep the car, because under HP the car isn't legally yours until that last payment, so it isn't treated as an asset to be given up.
The option most people overlook: buy a cheap car with cash
Here's the route that often beats finance during an IVA: save up and buy a cheaper car outright. It needs no credit check, no IP permission, and you own the car the moment you pay. If you can set aside £40–50 a month from your living costs, a year gets you a serviceable runaround without any new debt or high interest, and without adding pressure to your IVA.
Key point
It's not glamorous, but it's the option that keeps your comeback on track rather than working against it.
What changes when your IVA completes
When your IVA finishes, you'll get a Certificate of Completion and the £500 restriction is gone. You no longer need anyone's permission to take out finance. Your file still shows the IVA marker until six years from the start date (or your completion date if it ran longer), so you may still need a specialist lender for a while, but rates improve as your file recovers and your fresh on-time history builds.
Key point
That's the point AfterMy is built for: what to do first, in what order, staged around your own dates.
Frequently asked questions
Can I get car finance during an IVA without telling my IP?
Will my IP definitely refuse car finance?
Can I keep a car I'm already financing on HP?
Is it cheaper to wait until my IVA ends?
What's the catch with PCP during an IVA?
Still in your IVA?
You're in the right place. There's plenty you can do now to be ready, and we'll be here the day you finish.