Who should pay for your children’s car insurance?
A fresh-faced teenager enthusiastically clutching his or her new driver’s licence can present parents with a financial dilemma. The cost of insuring a teenager to drive can be very high – so who should foot the bill? Would it be better to continue to play taxi driver, and insist that your son or daughter wait a year or two before taking to the road?
Premiums for new drivers can cost thousands. Unfortunately, this can sometimes lead parents and teenagers into the temptation of cutting corners or being economical with the truth.
The Motor Insurance Bureau (MIB) point to a practice known as ‘fronting’, where parents add a child to a policy as a named driver, when in fact the child is the main driver.
However, this isn’t a harmless white lie to help young drivers to get mobile – it’s illegal and can have serious consequences, as Ashton West, Chief Executive of MIB, explains:
“Insurance is about peace of mind and knowing that the cost of your liability on the road is covered. In the event that the driver of a fronted policy is involved in an accident, both the policyholder and the driver could be open to additional costs, penalties, fines and, potentially, prosecution.”
So, who should pay for your children’s car insurance?
Cut the cost
Waiting longer before taking to the road reduces the cost of first time insurance, but if that’s not an option there are still ways of lowering the premium of that first policy.
- Small engine – driving a car with a small engine and no modifications could work out cheaper.
- Safety features – fitting an alarm and immobiliser could help save money, along with off-road and secure parking.
- Mileage restriction – some policies offer discounts for drivers who drive under 6000 miles a year.
- Driver tracking – some insurers offer in-car technology that monitors driver behaviour, rewarding young motorists for driving carefully.
- Check out online deals.
- Consider a higher level of driver training – the completion of a course like ‘Pass Plus’ could reduce the cost of insurance.
- Excess – opting to pay a larger voluntary excess in the event of making a claim can lower the price of the premium – but make sure you can afford to pay it first!
The cost of car insurance cover can take a big chunk out of a young person’s income, and likewise it can be a financial drain for parents picking up the bill. But the sooner a young person has their own policy, the sooner they can build up a good driving record and reduce the cost of their car insurance through a healthy no claim discount.
Photo Credit: Hoyasmeg
Who should pay for your children’s car insurance? is a guest post from Sainsbury’s money matters team