IVA increase after car finance finished

Rachelm91

Hi!
My IVA is due to increase by the amount of my car finance which is £92 in November when that’s paid off. However, I had an accident on Friday and my car has been classed as a total loss, my remaining finance will either paid by my gap insurance or out of my claim money. However my problem is now that I’ve had an accident and I’ve claimed my insurance is going to rocket. I got a quote for a basic car that I think I’ll be able to afford with my claim money, I need to buy a car because I work 33 mile from home, and the cheapest quote was £150 a month, this is over £100 more than I pay at the moment which is pretty much the same as the amount I pay for finance. 

Since I need my car will are they still likely to want the increase? I’m still going to have pretty much the same left at the end of the month now and not have the extra £91.
Im just worried because the creditors agreed to my IVA with the increased payments after my finance finished which I’m now worried I won’t be able to afford.
Thanks in advance for any advice!

mwarby

so your saying your worried about your insurance going up ?

First off its not clear that you'd be able to keep all the insurance payout, you'd need to discuss that with your IVA company. They may expect you to buy a cheaper car which will do you for rest of IVA, and to put rest into the IVA

In terms of the car insurance, if it's the best price you can get and you need the car it can be on your income and expenditure. Of course you'd expect the premium to drop again in time

It might be that your IP would need to seek permission from creditors as they have only a limited abaility to vary the payments downwards. I wouldn't worry too much, as its still your best offer and likely better for creditors than bankrutcy. You really need to speak to them and see what they say. It's likely IMHO that a bit of give and take will be called for, they will need to accept increased costs, you may need to accept a lesser/older vehicle

Rachelm91

Thanks for the reply!
I only expect to get around £2000 if I’m lucky from the claim, I’ve been looking around for a reliable cheap car that will last me at least until the end of my IVA, to get a car with low enough mileage is pretty much the amount I’m going to get, do you think that there will be a problem using the full claim money on a new car? I don’t want to buy a cheaper car and then it not last the rest of the IVA or cost me a fortune in maintenance. 

I’m struggling to get any communication from my IVA company at the moment with the current situation however once I get my claim money I’ll need to purchase a new car ASAP as they’ll want the hire car back straight away. I don’t think I’ll have enough time to wait for someone from the IVA company to give me the green light to buy a new car and how much they expect me to spend. 

mwarby

I think you'll be fine with the 2k as you wouldn't get a reliable car for much less

Rachelm91

Thanks for the input! When I eventually get the claim money through, I’ll email my IVA company and let them know the circumstances but just go ahead and buy a car anyways, hopefully they’ll understand.

mwarby

I would get prior clearance first, technically you have a windfall which should be paid over, so you want to stay on right side of your IP

Rachelm91

I struggle to get in touch with them, emails go unanswered or when I do get an email back they don’t even answer the question. 

Should I just email them now and explain what’s happened? And give them the estimate I think I’ll get and just say I have looked around and I don’t think I’ll get a reliable car for less. As soon as my claim money comes in though I will need to buy a car, I won’t be able to wait around.

mwarby

yep email them and explain about the insurance payout, and your new insurance quotes, and your intention to get a new car and why it would use all the payout

eg "I wrote my car of on x date, I am currently claiming on my insurance and expect to get a payout of approximately £2k, which I intend to use to purchase a replacement vehicle. The insurance claim means my future premiums will go up from £x to around  £y based on quotes for possible replacement vehicles. Please advise as to whether this is ok under the rules of my IVA, and any steps I need to take before proceeding"

Rachelm91

Thank you!
I have just sent an email regarding the insurance claim and needing a new car, I haven’t mentioned the insurance increase as yet, I’ll wait until that day comes to needing insurance incase I can get a better deal with someone else and avoiding having to ask for a reduction in the IVA at all.