5 legal ways to cut your teenage driver's insurance bill
Feature
by Nick Gibbs
With many teenage drivers receiving insurance quotes for £6,000 or more, both parents and children alike will be looking at ways to cut costs.
Only the most foolhardy will avoid the cost altogether and join the UK's 1.5 million uninsured drivers as the penalties can be extreme (you could face an immediate driving ban).
However many parents are willing to try and pull the wool over their insurer's eyes by telling them that they are the primary driver of the car, not their child, in order to reduce the premium.
This devious practice - known as 'fronting' - is illegal and the insurance industry is cracking down. Each year the Financial Ombudsman reckons some 1,000 insurance claims aren't paid because the relationship between the teenager and the car hasn't been properly described.
Getting your teenage driver insured will invariably be expensive but there are still plenty of legal ways to limit the damage with Moneywise's top tips.
1. If you haven't got a second car, buy one. Add your child as a named driver, but weight car use in your favour. Keep a log to avoid claims that you're 'fronting' for your child.
2. Consider putting in your teenager for the Pass Plus course to better prepare them for the road and earn discounts with some insurers (although the savings aren't as good as they were). Providers that do take it into account include Tesco, AA, Quinn Direct and Endsleigh.
3. Investigate i-kube or Young Marmalade. Both insist on Pass Plus and the fitting of a black box to enforce a no-night-driving rule (with a £60 penalty if the rule is broken). Young Marmalade is expanding the black box device to record driving style and is offering greater savings to cautious drivers.
4. Try the usual tricks for cutting car insurance: raise the excess, restrict the mileage, fit vehicle security and park off-street.
5. Make sure the car is in the cheapest possible insurance group. The smaller the car and engine, the less expensive the insurance.
If your child is 19 or over, taking the IAM's Skill for Life course can provide them insurance discounts in up to 93%* of cases via IAM Surety, as well as offering vital extra training to make them safer on the road. Up until Christmas the course is reduced to only £125, and as a Christmas gift voucher makes a great present.
*Based on car quotes given by Adelaide Insurance Services Ltd. to UK IAM members in July to Nov 2010, who met acceptance criteria.
Be careful before paying for a Pass Plus course, insurers only seem to offer the discount if the driver is to be the policy holder, not if they are a named driver. I think also it is only valid for a certain length of time.
I was told pass plus is only valid for 1 year after passing.
The insurer's are not doing their bit to sort out 'fronting' properly. Especially now that online application is the norm, there is little opportunity to provide additional information beyond ticking boxes on the form. Customers' responsibility should be to answer questions correctly, not to have to second-guess other things that the Insurer might want to know about.
I had an interesting discussion about what constitutes 'main driver'. Even when directly asked, the Insurer could not simply define what they meant by their own question! Our teenager was driving 2 miles to college and back each day (as there is no bus) and occasionally at other times (total: about 1200 miles/year), whilst I was driving much less often but for a greater total distance (5000 miles/year). Who is the 'main driver'?
It would be VERY easy for Insurers to ask up-front for annual milage to be broken down by driver, instead of just giving the total. Then they could set the premium appropriately. There is no excuse for them to take the premium, seek extra information after a claim is made, then declare the policy invalid because they did not know of something they did not take the trouble to ask about.
Get your house in order - don't blame your customers!
Similar applies to household and life insurance - Customers should be expected to be honest & answer truthfully, not be expected to guess what factors might affect risk to insurers!
Pass Plus can only be taken within ONE year of passing your practical driving test. and all the insurace companies i've looked at only give you a discount if you are the policy holder with Pass Plus and not for Named Drivers.
Quinn Direct - One of the cheapest for young people and i believe Swinton is aswell. But bear in mind Quinn recently went into adminstration but have started trading again in the UK.
I use, So far so good and cheap.
hi there just wanted to say that the smaller the engine the cheaper is not the case its is down to. horsepower/0-60 time/desil or petrol desil is cheaper/so an old 3.0l v6 jeep could cost less than a 1.2-1.4 corsa/clio.consider it you car will be slower and its more safe try it for your self (the car has to be more than 12 years old