Car insurance can cost a fortune for some people such as young drivers who have only recently passed their test and those with a motoring conviction. Premiums are higher because insurers perceive these individuals as being higher risk.
But all is not lost if you fall into one of the above groups, as there is a simple way to keep costs down, and that involves adding an older or more experienced motorist to your policy. Alternatively, you could also look into becoming a named driver on another motorist’s policy.
That said, while both these options may seem very appealing if you’re facing sky-high motor insurance premiums, you do need to beware of a few things before going ahead with this arrangement. Here we take a look at the things you need to consider.
How does adding a driver impact on motor insurance premiums?
As a motorist, it is 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, he or she will have the same level of cover as you.
By adding a named driver you 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.
Your insurer will base the named driver insurance premium on the fact you will be spending less time in the car – thereby reducing the chances of you having an accident and making a claim.
It’s also possible to get your name added to someone else’s policy; for example, 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 – so you 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.
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
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, or you could fall foul of the law.
If you are the main driver of a vehicle 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 motor insurance is effectively invalid and if the insurer finds out, you are 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.
As a younger motorist, the repercussions can be even more severe, because if you make a claim and the insurer then discovers you are the main driver – and not the named driver – you could find not only that your insurance has been invalidated, but that you have also got six points on your licence for driving uninsured.
For young drivers, six points means an instant ban; this, in turn, could make it a great deal harder to get affordable cover further down the line.
What other steps can you take to drive 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.
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. Sticking to the speed limit will also save you money, as points on your licence will bump up the cost of your cover.
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 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. You can find out more about what it is and how it works by reading our guide to telematics insurance.
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.
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. While you may have considered trying to save money by limiting your cover to third party, fire and theft (TPFT), you need to check the cost, as in recent years, TPFT has got more expensive – and could now cost more than the average comprehensive premium.
A better way to cut 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 garage 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.
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 do this is by logging onto MoneySuperMarket’s car insurance comparison page; here you can compare named driver car insurance quotes available through 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.