How can young drivers reduce the cost of motor insurance?
This is a common question which our Consumer Advice Centre staff are often asked.
Many young drivers find their motor insurance quotes are very expensive and, as a result, parents sometimes consider insuring their car in their name and adding their child as a second driver.
Although this is cheaper, it is not a good idea. It is illegal and is considered a form of insurance fraud because, if you insure yourself as the main driver, you are misleading the insurer about the risk.
Insurance premiums are more expensive for young drivers because they are more likely to have an accident.
If you do this and your insurance company finds out, it could withdraw your insurance or increase your premiums.
Your child could also face the following consequences:
- criminal charges of driving without insurance
- penalty points
- loss of licence if they have recently passed their test.
And, if someone else is injured, your insurer will have to pay third party costs. However, they may try to recover these costs from you, which could cost you a lot of money.
You may also lose your no-claims bonus and you and your child could find it very difficult and expensive to get insurance again.
This practice is known in the insurance industry as `fronting` and many insurers have checks in place to find out when it is going on.
They reject thousands of claims because of this type of fraud and will investigate any suspect claims thoroughly.
There are still some things young drivers can do to cut motor insurance costs. For example:
- shop around – you can save money by comparing deals from different insurers
- buy online – many insurers will offer their cheapest deals to new customers online
- choose your car carefully – a car with a smaller engine will be in a lower insurance band
- pay your premiums annually – paying monthly is often more expensive because you are charged interest.