Car finance - IVA

Barn74

Hi All,

Currently in a IVA which I’ve been in for 1 year. I have a HP whilst in the IVA but I need to change the car as it’s not a practical car anymore for my line of work. Needing something bigger currently pay £230 a month - my question is. I highly doubt I will get finance on another vehicle so am I able to get a relative to get me the car on finance in their name and I make the payments just as normal ?

This also lead me to think. What if one day my car got wrote off for whatever reason and I got paid out for the car. If I cannot get finance and getting a relative to get you the finance isn’t allowed what would you be able to do ? Minds working overtime

MovingForwards

I would ask the relative for £1k to buy a car and not ask them to finance anything in their name to avoid any potential issues of being unable to meet monthly payments.

Barn74

Hi,
Thanks for the reply. There is no current issue paying the finance payments on my current car. The only issue I face is the car isn’t practical for my anymore so was wondering if I can change this for another car that would be on finance.

mwarby

I suspect the concern was more that you have 4-5 years of IVA to go, whilst you can manage the payments now things may change, leaving the relative responsible. I think many if not most in an IVA would be running older vehicles rather than new

In the event the car was written off, I'd expect you to be able to keep some or all of proceeds to replace the car, but this may not be as desirable a car as you'd like

You might find the company financing your existing car might be sympathetic to a swap, but I wouldnt count on it (and they might rethink the current arrangement).

if you need the car for work could your employer help ?

TheGardener

Barn74 wrote: »

….
This also lead me to think. What if one day my car got wrote off for whatever reason and I got paid out for the car. If I cannot get finance and getting a relative to get you the finance isn’t allowed what would you be able to do ? ….

In that scenario then surely the insurance pay out would cover the cost of a replacement vehicle?...

mwarby

I guess it would depend on the specific terms of the vehicle finance, from searching PCP and write off it looks to me that much of proceeds goes to paying off the finance. You can end up at point where value of car in eyes of insurance company is less than the amount outstanding.

Presumably most of the time the owner of the vehicle would take on another vehicle on finance, but of course in an IVA this may not be possible.

MEM62

TheGardener wrote: »

In that scenario then surely the insurance pay out would cover the cost of a replacement vehicle?...

Nope. Any insurance settlement would need to settle the outstanding finance. If there is anything left over that may be put towards a replacement vehicle.

Andyjflet

Unfortunately, financing a car for the use of a different driver is know as an accommodation deal and forbidden in the rules of the FCA. If discovered then this could result in fraud charges. Your chances of getting a new finance deal are also very slim if you are on an IVA

foxy-stoat

What your proposing isn't going to work.

You will need to settle the finance on your current car either before or on the day you sell it.

Then you will have to convince your IP that your relative has taken out a loan in his name and you are agreeing to pay for it - you are still obtaining new credit but it wont be on a formal basis so I doubt the monthly payment can be included as part of your expenses.

I would not be taking out credit for a family member if they are on an IVA - if I wanted to help I would go with the, heres £1000, now find a car that is suitable.

What car have you got that isn't now practicable in your line of work, have you changed jobs recently?

foxy-stoat

Andyjflet wrote: »

Unfortunately, financing a car for the use of a different driver is know as an accommodation deal and forbidden in the rules of the FCA. If discovered then this could result in fraud charges. Your chances of getting a new finance deal are also very slim if you are on an IVA

PCP or HP yes, personal bank loan no.

Andyjflet

foxy-stoat wrote: »

PCP or HP yes, personal bank loan no.

The OP didn't mention a personal loan, the specific quotation was about vehicle finance.