Does an IVA Affect Car Insurance?
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MoneyNerd introduces enquiries to The Debt Advice Service and may receive a referral fee. For free, independent guidance and help finding a debt adviser, visit MoneyHelper.
This information and enquiry service is not a full financial assessment or a guarantee of suitability or debt write-off. Debt solutions are not suitable for everyone. Fees may apply, and your credit record and assets may be affected. Get advice on your circumstances before choosing a solution.
An Individual Voluntary Arrangement (IVA) can affect access to credit used to pay car insurance monthly. This guide explains the difference between obtaining insurance and financing the premium.
An IVA can affect your budget and credit options. Ask your insolvency practitioner how the agreed terms apply to insurance premiums before changing cover.
In this article, we’re going to explain:
- How an IVA impacts your ability to get car insurance.
- If it’s possible to get cheap car insurance with an IVA.
- How to reduce your insurance costs.
This guide gives general information; your insurer and IVA supervisor can explain the requirements for your circumstances.
Will It Impact Your Ability To Get Your Car Insured?
Monthly insurance payments often involve a credit agreement. An IVA does not create an absolute ban on monthly insurance, but the insurer or finance provider may carry out credit checks, and the IVA terms may require the supervisor’s permission. Confirm both before applying.
An IVA or poor credit may restrict premium-finance options. It does not automatically make you a high-risk driver or mean you must use a special “subprime” insurer. Answer the insurer’s actual questions accurately and compare suitable cover. See related guidance.
Will You Be Able To Get It at A Cheap Rate?
Insurers and premium-finance providers use different criteria. Compare the total annual cost of paying upfront with instalments, including interest and fees, and check affordability within your IVA budget.
Do not assume a specialist provider is necessary or cheaper. Compare available policies and finance terms without repeatedly making full credit applications.
Lowering the Cost
If you do find that the cost of your car insurance has gone up due to you being under an IVA, there are a few things you can try to get the cost down. We list some below.
- Switch to a car in a cheaper insurance bracket.
- Give an accurate estimate of your actual annual mileage
- Choose only an excess you could afford to pay if you claim
- Compare suitable cover levels; less cover is not always cheaper
- Declare commuting and business use accurately; do not omit use that you need
- Consider an approved telematics policy if its terms suit how you drive
- Describe where the car is actually kept overnight accurately
Shop Around for the Best Deals
All insurers are not equal, some calculate risk in different ways Therefore, it really can pay to shop around and get as many quotes as you can. You can also try using a comparison website, that will get you quotes from a whole range of car insurance firms so that you can choose the cheapest.
