Keeping Your Car, Question by Question
How an everyday car stays with you throughout an IVA.
Can I keep my car during an IVA?
Yes, in the great majority of cases. An IVA is designed to leave you able to live and work, so a car you need is normally kept. It is treated as an excluded asset, meaning it is not sold or surrendered, and the running costs are allowed for in your budget. Only an unusually valuable car owned outright is likely to be questioned.
What makes a car 'reasonable'?
Broadly, that it suits your needs without being a luxury. A sensible car for commuting, work or family use is fine, even a fairly modern one. What draws attention is a high-value or prestige vehicle that looks out of step with someone repaying debt. If your car is ordinary and practical, it almost always falls comfortably on the right side of that line.
Are the running costs covered?
Yes. If you need a car, the costs of keeping it on the road, fuel, insurance, tax, servicing and repairs, are included as essential expenses in the budget your IVA is based on. This means keeping your car is properly accounted for, not something you have to squeeze out of nothing. Tell your supervisor if these costs change so your budget stays accurate.
What if my car is on finance?
You can usually keep it by keeping up the payments. On hire purchase or PCP, the finance company owns the car until the deal ends, so it is not an asset you lose. The finance stays outside your IVA and the monthly payment is treated as a priority cost, as long as it is reasonable. Our dedicated guide explains what happens with finance in more detail.
How do I make sure I keep it?
Make sure it is excluded, in writing. The single most important step is to confirm that your car is listed as an excluded asset in your proposal, and to ask your provider to put in writing that you will not be required to sell it. Doing this before you sign removes any doubt and protects you from misunderstandings once the IVA is running.
Can I be told to sell my car?
Only if it is genuinely high-value and owned outright. In that situation, you might be asked to sell, replace it with something cheaper, and pay the difference into the IVA. For an ordinary car you need, this should not happen. If you are ever asked to give up a car you rely on, it is worth getting independent advice before agreeing to anything.
What if I need to replace it during the IVA?
That is possible, but needs permission. If your car dies or your finance ends mid-IVA, you must speak to your supervisor before taking on any replacement costing over a small limit. A like-for-like replacement at a similar monthly cost is the most likely to be agreed. Buying a cheap car outright is often the simplest route. Our guide on buying a car in an IVA covers this.
Should I get advice?
Yes, particularly about a car you depend on. A free, impartial adviser can confirm that your car will be kept and properly excluded, and explain your options if you might need to change it later. It costs nothing, and a short conversation can give you real peace of mind that your transport is secure throughout the arrangement.
