Introduction
If you're considering getting a car finance deal but you have an Individual Voluntary Arrangement (IVA), you may be wondering if it's still possible. The good news is that it is! In this article, we'll guide you through everything you need to know about getting car finance with an IVA in 2023.
What is an IVA?
Before we dive into car finance options, let's briefly discuss what an IVA is. An IVA is a legally binding agreement between you and your creditors to pay off your debts over a set period of time. It's a popular alternative to bankruptcy because it allows you to keep your assets, like your car.
The Impact of an IVA on Car Finance
Having an IVA can impact your credit score, which in turn affects your ability to get car finance. However, there are lenders who specialize in providing car finance to those with an IVA. These lenders understand that your IVA is a step towards financial stability and are willing to work with you.
Types of Car Finance Available with an IVA
1. Hire Purchase
Hire purchase is a type of car finance where you pay a deposit and then make monthly payments. Once you've made all the payments, the car belongs to you. With an IVA, it's possible to get hire purchase, but the interest rates may be higher.
2. Personal Contract Purchase
Personal contract purchase (PCP) is similar to hire purchase, but with PCP, you have the option to buy the car at the end of the agreement or return it. Again, it's possible to get PCP with an IVA, but the interest rates may be higher.
3. Guarantor Loans
Guarantor loans involve having someone else guarantee the loan. This person is usually a family member or friend. With an IVA, you may be able to get a guarantor loan for car finance. This is a good option if you're struggling to get approved for other types of finance.
How to Improve Your Chances of Getting Car Finance with an IVA
Here are some tips to help improve your chances of getting car finance with an IVA:
- Save up for a deposit to reduce the amount you need to borrow
- Choose a less expensive car to reduce the risk for the lender
- Work on improving your credit score by paying bills on time and reducing debt
- Consider getting a guarantor to co-sign the loan
Conclusion
Getting car finance with an IVA may seem daunting, but it's definitely possible. There are lenders who specialize in providing car finance to those with an IVA. By following the tips outlined in this article, you can improve your chances of getting approved for car finance and take a step towards financial stability.
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