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Considering a DMP?

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i The advice on this page applies to anyone with personal debts taken out in the UK.

How does a DMP affect me?

Can I have a car during a DMP?

At some point during your debt management plan (DMP), you may consider getting a car or replacing the one you currently have.  If you already have a car, there are several things you’ll need to consider.

While you’re on a DMP it’s important to keep your transport costs under control.

household bills iconMandatory MOTs have been reinstated from 1 August 2020

If your MOT was postponed due to the pandemic, you will have received a six-month exemption from the day your MOT was due*.

If your MOT is due after 1 August 2020, you need to book your MOT as normal.

As MOTs are an annual cost, they can be difficult to cover, especially if you're dealing with problem debt. If you're a client who's worried that an upcoming MOT payment might make you struggle with your debt solution, please get in touch with us

*If you're based in Northern Ireland and your MOT was postponed, you're exempt for 12 months from the day your MOT was due.

It’s not against any guidelines to buy a car during your DMP. However, your DMP agreement is likely to state that you must not take out any additional credit without speaking to your DMP provider first.

Before buying a car, it’s important to make sure that the associated costs are realistic and affordable. Buying a car is likely to affect your overall budget, as you’ll need to factor in the costs involved. Once these costs are known, you’ll need to review your budget to make sure you can cover the costs you already have.

Car costs include:

  • Road tax
  • Insurance
  • MOT
  • Petrol, diesel or electricity
  • Parking
  • Additional vehicle warranty
  • Maintenance costs, such as repairs and replacement tyres 


Costs such as road tax and MOTs are usually paid for annually, so you’ll need to divide those by 12, to know how much to set aside in your budget each month. You can make monthly payments on your road tax if this is easier for you. 


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Considering a DMP?

We can help with free, impartial debt advice online now.

Get debt help

Is a car right for me?

Depending on your circumstances, you may find that a car is necessary or at least highly beneficial for you. For example:

  • You live in a rural area with limited public transport
  • You have to commute some distance to work
  • You have dependent children
  • You have health problems
  • You’re a full-time carer or have elderly or vulnerable relatives you visit frequently

Compare what you would spend on public transport to meet your needs versus the costs of having a car. Once you know what you’d spend in each scenario you can make a more informed decision on whether or not a car is right for you.

No one person’s situation is identical to another person’s. You should think carefully about your needs and responsibilities, and think about how owning a car could improve your situation.

You’ll also need to know how you’re going to cover the cost of purchasing a car, as buying a car can be expensive. From buying one outright, or on hire purchase, or getting a loan to cover the cost, they’re one of the biggest purchases you’re likely to make. Again, you must talk to your DMP provider before you take out any credit in order to buy a car, as it could affect your plan.

If you’re buying a used car at a low price, make sure you’re buying it through a reputable merchant. Check online to make sure that there are no parking fines registered against the car, or that it’s been previously reported as stolen.

It’s worth carrying out a Hire Purchase Investigation (HPI) check to make sure that any second-hand car you’re considering doesn't have unpaid finance or debts associated with it. Please bear in mind there's usually a fee charged for this service.

However, as long as you weren't aware of an outstanding hire purchase agreement at the time you bought the vehicle, you'll usually be able to keep it.

I can afford to buy a car – what should I do?

It’s likely that your DMP was recommended to you because you’re not able to make the minimum payments on your debts. If you have the money to buy a car outright, you should get in touch with your DMP provider to see how you can deal with your debts first.

The terms of your DMP may state that you pay any increased or extra income into your DMP to pay your debt off quicker. Buying a car instead of paying your debts off may be considered unfair to your creditors.

Depending on how much money you have, you may instead be able to make full and final settlement offers on your debts. If in doubt, check with your DMP provider and they’ll look at your options.

Can I lease a car through the Motability Scheme?

To be eligible for leasing a car through the Motability Scheme, you need to be in receipt of one of the following mobility allowances:

  • Higher Rate Mobility Component of Disability Living Allowance (HRMC DLA)
  • Enhanced Rate Mobility Component of Personal Independence Payment (ERMC PIP)
  • War Pensioners' Mobility Supplement (WPMS)
  • Armed Forces Independence Payment (AFIP)

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If you claim any of these benefits, you must have at least 12 months’ award length remaining in order to qualify for the Motability scheme. Please note that claiming Attendance Allowance doesn’t make you eligible.

You can check if you’re eligible for the Motability Scheme on the Motability website.

How can I save money on owning a car?

There are several ways you can reduce the costs of keeping a car. They include:

  • Regularly comparing the price of car insurance through an FCA-regulated comparison site
  • Buying your fuel at supermarkets, as they have more competitive prices, and sometimes give discounts through their membership schemes or your weekly shop
  • Cutting back on bad driver habits that drain your fuel quicker. These include driving too fast, over-revving your engine or using air conditioning when it’s not hot
  • Driving colleagues to work in exchange for some money towards fuel (as long as they’re in your local area)

Instead of owning a car, you could join what’s known as a ‘car club’. This lets you hire a car by the hour as needed. The cost of repairs, car insurance and breakdown cover are included in the rental fee. You can find out more about car clubs on some local authority websites.

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If you’re struggling to repay your debts, get free, impartial debt advice and we'll recommend the best solution for your situation. Or call our advisors (free from all landlines and mobiles).