diff --git a/lib/modules/custom-build-vm.nix b/lib/modules/custom-build-vm.nix
index 00936a2..12f2e16 100644
--- a/lib/modules/custom-build-vm.nix
+++ b/lib/modules/custom-build-vm.nix
@@ -124,7 +124,31 @@ in {
         ;
       in {
         vmVariant = extendVMConfig vmVariant;
-        vmVariantWithBootLoader = extendVMConfig vmVariantWithBootLoader;
+        vmVariantWithBootLoader =
+          (extendVMConfig vmVariantWithBootLoader) //
+          # Overwrite users with `hashedPasswordFile`s as `sops-nix` does not seem to work with `build-vm-with-bootloader`
+          {
+            users.users = builtins.listToAttrs (
+              builtins.map (
+                name: {
+                  inherit name;
+
+                  value = {
+                    hashedPasswordFile = lib.mkVMOverride null;
+                    password = lib.mkVMOverride "test";
+                  };
+                })
+            (builtins.filter
+              (
+                name:
+                  let
+                    user = config.users.users.${name};
+                  in
+                    (
+                      (user.hashedPasswordFile != null)
+                    ))
+              (builtins.attrNames config.users.users)));
+          };
       };
 
     system.build =