If you have recently passed your driving test, or perhaps have a motoring conviction, it can be quite expensive to get car insurance. Your premium is likely higher because you are considered more at risk of having an accident.
All is not lost if you do happen to fall into one of the above groups, as there is a simple way to keep costs down. It involves adding an older or more experienced motorist to your policy or alternatively, you could also look into becoming a named driver on another motorist’s policy.
However, while both these options may seem very appealing if you’re facing very high car insurance premiums, you need to be aware of a few things before adding a named driver to your policy. Let’s take a look at what can affect your insurance.
How does adding a named driver impact on premiums?
As a motorist, it’s a legal requirement to have car cover in place. When applying for a policy you will need to provide the insurer with not only your own name, but also details of any other individuals you want added alongside the main driver. Once you’ve given the details of the named driver, they will have the same level of cover as you.
Adding a named driver can help to bring down the cost of your car insurance premium because you won’t be the only person driving the car, and therefore the associated cost is lessened. In fact, according to MoneySuperMarket data, 35% of younger drivers aged 17 to 24 have a named driver on their policy, making their premiums up to 13% cheaper.
Why does adding a named driver make your car insurance cheaper?
Adding a named driver often makes the premiums cheaper because it’s assumed you’ll spend less time driving, since the car is shared. This reduces your probability of having an accident and making a claim, which is reflected in cheaper car insurance quotes.
Can you get added to another driver’s policy?
It’s also possible to get your name added to someone else’s policy: as a young driver, you could add your name to your parent’s car insurance policy. Having done this, you are perfectly within the law to use that car.
Crucially, however, you need to be aware that if you are a named driver, you usually won’t be able to build up your own no-claims record – so won’t be able to benefit from a no-claims discount (NCD) on your car insurance in the future.
Admittedly, some insurers will permit named drivers to earn their own NCD which can be used to get lower car insurance premiums further down the line, but this is usually only the case if you stay with the same insurer.
If you’re considering this, you need to do a bit of research, as there are rarely rewards for loyalty when it comes to insurance. You’ll still need to weigh up the benefits of being able to use your NCD with your existing insurer against switching to a new insurer offering a lower motor insurance premium.
Don’t fall into the fronting trap
While the idea of a named driver car insurance policy may sound very appealing – and significantly lighter on your wallet – you need to tread very carefully, and be careful you don’t break the law.
For instance, if you are the main driver of a vehicle then the insurance for that car must be in your name. If it isn’t you are breaking the law and committing a crime called fronting. Your car insurance is effectively invalid and if the insurer finds out, you are more than likely to have any claim turned down.
In some cases, you could even find your cover is cancelled altogether. This could leave you stuck struggling to get car insurance in the future, as you would then have to declare the fact you had fronted to other car insurance companies – who may then refuse to cover you.
If you are a younger motorist, the repercussions can be even more severe. If you make a claim and the insurer then discovers you are the main driver – and not the named driver – you could find that your insurance has been invalidated and you have also got six points on your licence for driving whilst not being insured.
And for young drivers, six points means an instant ban, which, in turn, could make it much harder to get affordable cover further down the line. Basically, make sure you don’t fall foul of the law or you could have a real struggle getting insurance, especially affordable cover.
What else drives down the cost of car cover?
If you are struggling to get to grips with costly car insurance, there are plenty of other steps you can take to keep costs down, aside from opting for a named driver car insurance policy.
No claims discount: One of the best ways to reduce your car insurance premiums is by driving carefully and sensibly and building up a no-claims discount. Many insurers give discounts of up to 70% to drivers who haven’t claimed for more than five years.
Black box insurance: A black box insurance policy could be a good option. This is where you have a ‘black box’ fitted into your car so the insurer can monitor how you drive. If you show you drive safely and responsibly you can then benefit from discounts on your premium.
Telematics insurance is becoming an increasingly popular option for young drivers as they face the steepest premiums – younger drivers can save up £202 a year on their policy. You can find out more about what it is and how it works by reading our guide to telematics insurance.
Pay higher excess: You could also consider paying a higher excess as this can mean a lower premium; the excess is the chunk of the cost you pay yourself in the event of a claim. You therefore need to make sure you can afford to pay out for the higher excess if you do have to make a claim.
Pass plus: Young drivers could look into taking the Pass Plus course. This advanced driving course can result in a discount when you come to take out cover. It depends where you live and the driving instructor you use, but budget for around £35 an hour for approximately six hours of training.
Third party insurance: While you may have considered trying to save money by limiting your cover to third party only or third party, fire and theft (TPFT) cover, you’ll need to double check the cost. In recent years, these types of insurance have become more expensive – and now cost more than the average fully comprehensive premium.
More ways to get cheaper car insurance
- Sticking to the speed limit will also save you money, as points on your licence will bump up the cost of your cover, not to mention you’ll get better fuel economy.
- Where possible, it’s worth trying to pay your full premium upfront, rather than in monthly instalments by direct debit, as paying monthly will cost you more.
- A good way of cutting costs is by improving the security features of your car, such as adding an alarm or an immobiliser.
- You should also try and park your car in a well-lit space or driveway if you can, as most insurers will give you a discount for keeping your car somewhere safe.
- When buying a car, also consider how much it will cost to insure, as you will, for example, pay extra to cover a smart little sporty model – find out about the cheapest cars to insure.
- Finally, never automatically renew your cover with your existing insurer at renewal time, as you should be able to find a far more competitive deal by shopping around.
One of the simplest ways to get a better deal is by logging onto MoneySuperMarket’s car insurance comparison page, where you can compare named driver car insurance quotes available through some leading providers.
Aside from these tips, there are a host of other things you can do to keep a lid on costs – for more ideas visit our money-saving tips page.
All MoneySuperMarket data. Collected and correct as of April to June 2017.