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Can You Get Car Insurance After Bankruptcy, IVA, or DRO?

If you have gone bankrupt, created an Individual Voluntary Arrangement (IVA), or received a Debt Relief Order (DRO), getting car insurance might be tougher. Insurance companies often see people with money problems as a higher risk. This can result in higher car insurance costs.

You can still get car insurance, even if your credit history is not good. Some insurance providers want to help people who are having financial problems. They offer special policies that can help you find coverage that fits your budget.

How Financial Issues Affect Car Insurance Costs

Insurance providers look at many factors when setting car insurance rates. If you have faced financial problems, your premiums might be higher. There are two main reasons for this.

  • Bankruptcy, IVAs, and DROs can lower your credit score. A lower score can make monthly payments feel more risky for insurance companies. Many of them will check your credit before giving you car insurance.
  • Insurance companies may think that people with money problems might not pay their bills. This could lead to higher premiums.

Some insurance companies support people with poor credit. They make sure these individuals can still get car insurance at a good price.

Car Insurance Costs for Bankrupts, IVA, and DRO Customers

Insurance prices for people facing financial challenges depend on several factors. These factors include your driving record, the kind of coverage you pick, and your personal circumstances. Here are the average car insurance costs based on different financial situations.

Financial Status Average Annual Premium (UK, 2024)
Standard driver £400 - £800
Bad credit history £700 - £1,300
IVA or DRO holders £900 - £1,500
Declared bankrupt £1,200 - £2,000

Monthly payments can support people who find it hard to pay for everything all at once. However, remember that these payments may come with added interest.

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Understanding Bankruptcy, IVA, and DRO Car Insurance

Bankruptcy and Car Insurance

Being bankrupt can make it harder to get cheap car insurance. A bankruptcy can remain on your credit report for as long as six years. This can affect your financial stability.

Many insurance companies check your credit score before giving you a policy. Some might refuse to insure people who have been bankrupt before. Others could ask for higher rates from them. However, there are special providers that offer custom options. This means people in this situation can still get car insurance.

Individual Voluntary Arrangement (IVA) and Car Insurance

An IVA is a legal plan. It helps people pay back their creditors within a set time, usually five years. This plan stops creditors from taking them to court. However, it can lower credit scores.

Many insurance companies see IVAs as a risk to their funds. This may lead to higher costs or issues when getting coverage. However, some insurance providers focus on giving car insurance to people who have an IVA.

Debt Relief Order (DRO) and Car Insurance

A DRO is a way to assist people with low income and limited assets with their debts. It stops your debts for 12 months. After this time, some debts might be cleared away.

A DRO can help with money issues. However, it may make it hard to get credit. Insurance companies might see people with a DRO as a risk. This could result in higher premiums or needing to pay for the entire year in advance instead of making monthly payments.

Understanding Bankruptcy, IVA, and DRO Car Insurance

Ways to Lower Car Insurance Costs After Bankruptcy, IVA, or DRO

  • Look at quotes from different car insurance providers to get the cheapest price.
  • Select a car that is in a low insurance group to cut your insurance costs.
  • Keep your driving record clear. Insurers usually provide better rates to safe drivers.
  • Choose third-party cover if comprehensive cover costs too much.
  • Increase your voluntary excess to reduce your monthly payments.
  • Pay for your insurance in one full yearly payment to avoid extra interest fees.
  • Think about a telematics policy that sets your premium based on how you drive.

These tips can help you get a low-cost car insurance policy. You can do this even if you are facing money troubles.

Types of Car Insurance Cover Available

Cover Type What It Includes Best For
Third-Party Only Covers damage to others but not your own car. Those looking for the lowest price.
Third-Party, Fire & Theft Covers third-party damages, fire, and theft. Drivers with low-value cars.
Comprehensive Cover Covers all of the above plus your own car. Those wanting full protection.

Some providers give more coverage choices. These choices include breakdown cover, help for legal costs, and personal accident cover.

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Why Use a Specialist Car Insurance Provider?

  • Some insurance companies do not cover people with poor credit history, past bankruptcy, or insolvency. Specialist providers look at each person's situation and offer tailored policies.
  • Many specialist insurers let customers pay for their policy in monthly payments.
  • Some providers give instant coverage along with immediate policy documents.
  • A panel of insurance specialists can help find representative cost savings for applicants.

Using several car insurance providers can help people with money problems find coverage that is affordable.

Comparison of Personal Debt Solutions

Type Description Duration
Individual Bankruptcy A legal process for individuals who cannot repay debts. 12 months
Individual Voluntary Agreement (IVA) A legally binding agreement to pay creditors over time. 5 years
Debt Management Plan (DMP) An informal agreement to repay debts over a flexible period. Varies
Debt Relief Order (DRO) A form of insolvency for individuals with low income and low assets. 12 months
Debt Arrangement Scheme (DAS) A Scottish government initiative for structured debt repayment. Flexible

Every type of debt solution has benefits and drawbacks. A financial advisor can help you find the best choice for your situation.

Compare Car Insurance for Bankrupt, IVA, and DRO Customers

Compare Car Insurance for Bankrupt, IVA, and DRO Customers

  • Find quotes from several insurance providers that offer car insurance for bad credit.
  • Get personalised policies that match your situation.
  • Compare quotations to find the most affordable coverage.

FAQs About Bankrupt, IVA, or DRO Car Insurance

Yes, it might be more expensive. Insurance providers have special plans for people who have financial difficulties.

Most insurance companies look at your credit. However, there are some special providers that offer policies without needing a credit check.

Yes, some insurance companies let you pay every month. But they might add extra interest to those payments.

Bankruptcy usually stays on your credit report for six years.

Money problems can make it tough for you to buy different types of insurance. This includes home insurance.

Some insurance companies allow you to get a first quote without needing a registration number. But you must provide it before you can finalise a policy.

The Financial Conduct Authority looks after car insurance providers in the United Kingdom. They ensure that prices are fair, information is clear, and consumers are kept safe.

Yes, you can switch to a new provider that focuses on car insurance for people in financial difficulties. They usually have better rates.

A group of insurance providers reviews several quotes. They want to help you get a policy that matches your individual circumstances and budget.

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Page last updated on: 06/05/2025

Page reviewed by: Shay Ramani

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