An IVA is only available to residents in England, Wales and NI

We get lots of car leasing with IVA questions – so we’ve put together some information about how car leasing and other kinds of car finance agreement work if you have – or are applying for – an Individual Voluntary Arrangement (IVA).

Don’t let limited car leasing options put you off

Try not to be put off the idea of using an IVA because finding a suitable car leasing deal might be a little harder. Writing off unaffordable debt and getting a fresh financial start is likely to be the best idea in the long run – and with patience, you’ll be able to rebuild your credit score.

Why choose IVA Plan?

  • Write off unsecured debts over £7,000
  • Stop interest and charges soaring
  • Reduced payments from £100 per month

What is an IVA?

An Individual Voluntary Arrangement (IVA) is a kind of formal debt solution that is designed to get you back in control of your finances. It’s called a ‘formal’ debt solution because it is a legally binding agreement that’s set up by a qualified insolvency practitioner (IP) on your behalf.

An IVA gathers all your unsecured debts and turns them into one affordable monthly repayment.

Usually, your IVA payments will last for 5-6 years – and your IP will take each payment and use it to pay an amount to each of your creditors (the people or company you owe money to). 

When your final IVA payment is made, your creditors agree that your debt to them is settled – with any outstanding amount still owing written off. From the beginning of the IVA application right through to your final payment, your IP will speak to your creditors on your behalf – so you don’t have to worry about them calling or writing to you.

How would an IVA affect your chance of getting a new car finance deal or a car lease?

Since an IVA is a ‘formal’ agreement, it means both you and the companies you owe money to have to agree to a series of rules around how the agreement will work.

For your creditors, this includes not contacting you, not adding any interest, and not taking debt collection action. For you, your IVA agreement will include strict limits on the amount of credit you can have while it’s in force.

Because of the agreements you make, you will have to talk to your IP about any personal contract hire (car lease) plans that you’re thinking about.

Talking to your insolvency practitioner about a car lease agreement

It’s not a lender that has the first say about whether or not you can lease a car or sign up for hire purchase while you have an IVA. Instead, it’s the insolvency practitioners that helped you set your debt solution up.

During your IVA, you need permission from your IP to get credit of £500 or more. If you don’t ask permission, your IVA could fail due to a breach of terms.

If committing to a lease is sustainable given your current living costs and budget, then your IP is likely to approve – especially if it’s helpful for work. However, it’s essential that you ask before you apply.

Here's an example of how we can help.

Let's say you owe...

Bank Loans £5,366.00
Gas Bills £129
Pay Day Loan £1,989.00
Overdraft £1,234.68
Debt Collection Agency £380.16
Short Term Loan £243.88
Council Debt £1,009.24
Credit Card £8,433.00

Total amount owed: £19,256.57

Customer monthly repayments before and after an IVA.

Example case completed in 2023. Repayment calculated using income and expenditure data. Monthly payments and write off percentages are based on individual circumstances.

Check if you qualify

Objections from a car finance company

Of course, it’s not just your IP who will decide whether or not you can enter into a credit agreement. The lease or finance company that you apply to will also have to decide whether they will give you the credit needed.

They will usually do this by checking your credit record and affordability. This could lead to a couple of problems – but they’re not impossible to solve.

Poor credit history

First is your credit rating. An IVA is recorded on your credit report – and some lenders will not offer credit to someone with a current debt solution.

Also, if struggles with your previous monthly payments mean you have missed payments or have one or more county court judgements against your name, this will also mean you’re likely to have a poor credit score. A bad credit rating will mean that some finance companies will consider you too much of a risk and may not offer you a lease agreement.


The second possible problem is affordability. An IVA is designed so that you are paying back as much as you can towards your debts. 

While your monthly repayments have to be affordable, part of your IVA agreement tells creditors that if your disposable income goes up, the amount they get back from you will also go up. This may lead to affordability issues – as more of your income could go towards paying your creditors.

What happens if I have a lease car when I apply for an IVA?

If you have a lease vehicle and plan to start an IVA while your lease is running, it’s perfectly possible that the insolvency practitioners handling your debt solution will let you keep the vehicle. There are a couple of reasons for this:

You don’t own the vehicle

Since the vehicle is not yours, it cannot be considered an asset (something valuable you own) that can be used to pay off part of your debt. 

Leases can be expensive to terminate early

Ending a lease early will often mean paying a large termination fee. It’s not uncommon for this fee to be 50% of your remaining lease payments – due in one large payment when you surrender the car. Since debt management plans are designed to get you out of debt, keeping the car is often preferable to a large penalty payment.

Business contract hire during an IVA

A lot of people wonder if they can get car finance, a car loan, or a lease deal through their business when they have an IVA – and the answer is usually yes. At least, your IVA won’t stop you.

If you’re the director of a business, your personal circumstances aren’t taken into consideration when you apply for car finance or car insurance through your company – instead, finance availability is based on a credit check carried out on your company.

With this in mind, getting a good deal car or van leasing is often easier if it’s done through your business when you have an IVA.

Finding bad credit car leasing

There are specialist car finance and car leasing firms who put ‘bad credit’ deals together for people with lower credit scores. 

In fact, some companies claim not to use your credit history at all when they decide whether or not they will offer you a vehicle. Again, the key is affordability – and checking that you can afford the repayments is an essential part of being responsible lenders.

By talking to your insolvency practitioner and a reputable car finance or lease company, you could find yourself back behind the wheel much sooner than you might have thought.

You could write off up to 81% of your unsecured debt today