If you’re a parent of a child who has recently learnt to drive, it’s often tempting to help them buy their first car and contribute to their first insurance policy. But then when you then look into premium prices you are met with a big shock – car insurance for young drivers is very expensive, because they are considered a high risk of making a claim.
17 to 24 year olds are considered the highest risk because they are statistically more likely to cause an accident, make a claim or have a claim made against them. In fact, this age group make up almost 25% of all car insurance claims in the UK, so higher insurance premiums are a way for insurers to make back their money.
This means that young drivers will have to pay, on average, more than twice (£1,242*) the national average premium (£592*) for a fully comprehensive policy.
Parents may be tempted to put themselves as the main driver on their child’s car, because this would make car insurance much cheaper. While this can save you money, it’s actually illegal and will cause more problems than it’s worth.
MoneySuperMarket data, correct as of June 2017
But what is fronting?
Fronting is when an older, more experienced driver falsely insures a vehicle in their own name when the main driver is actually a younger, riskier motorist. The greatest temptation for fronting is when parents might insure a vehicle that actually belongs to their child in a bid to save money on car insurance.
It’s illegal: fronting is considered insurance fraud because the older, more experienced driver is falsely insuring themselves as the main driver.
It doesn’t matter if you do it innocently or deliberately; if you’re caught it can mean trouble for both drivers. At best, any claims you make will be questioned and denied, and your cover will become invalid, meaning you will get a big bill.
But more seriously, because fronting is a criminal offence, you could end up in court or with a criminal record, just for trying to save a few pounds on an insurance policy. The knock on effect of this means you will probably pay even more for your insurance next time and possibly find it more difficult for other financial products, such as loans or credit cards.
How do you decide who the main driver is?
Most insurance companies will ask the appropriate questions on your application form, and staff are trained to observe for potential fronting cases. If you’re in any doubt, ask - it will save you a lot of time, trouble and money further down the line.
The easiest way to figure out who the main driver is to ask yourself who is responsible for its upkeep and who drives it most? If, for example, you drive to and from work every day in the car, then you are considered the main driver. However, if your child takes the car to university or away from the family home, then they would be the main driver and would need to register the insurance to their own address.
The main way insurance companies discover instances of fronting is when claims are made by the additional driver and the car is registered miles away from the accident. Suspicions are aroused by inconsistent addresses, claims are investigated carefully and the fronting is discovered.
If guilty of fronting, the insurer will not pay for your claims, but they are legally obliged to pay for any third party claims, and can then try and recover the costs from you.
MoneySuperMarket data, correct as of June 2017
Other ways to save money on car insurance
There are plenty of legal ways to cut the cost of car insurance for young drivers. For instance, parents can instead add themselves as a named driver on their child’s policy. This lowers the premium by 13%, on average, because the insurer will expect there to be a more experienced driver behind the wheel at least some of the time – and in fact, 35% of younger drivers already have this in the UK.
It's legal to add a young driver to a parent’s policy if they only use the car on occasion. This will increase the main driver’s insurance premium, but it will still be much less than a full policy for the younger driver. However, if a claim is made then it will affect the main driver’s no claims discount.
Younger drivers could also consider telematics insurance. This is where a black box is fitted to the car allowing the insurer to monitor where, when and how the car is driven. In our data-driven world, this can demonstrate to the insurer that you are a sensible and skilful driver, therefore bringing down the price of premiums.
As always, comparing car insurance quotes is the best way to save money on your premiums. People might assume that third party car insurance is the cheapest, but in fact fully comprehensive cover tends to be the cheapest! In January 2018 the average price of a comprehensive policy for a 17 to 19-year-old was £1,511.00*, but third party only cover was almost £1,290 more expensive. Find out why fully comp car insurance is no longer the most expensive.
And when you review insurers, make sure you check the detail of what’s included in the policy. Sometimes going with the cheapest quote can be a false economy because you might find certain things aren’t included or the insurer is known for not settling claims.
MoneySuperMarket data, correct as of February 2018