Young Driver Insurance - To Front or not to Front?

I've mentioned fronting in a previous post outlining the perils of lying to your insurance company, but right now fronting - the term for when a young driver insures their car in the name of an older relative (usually mum or dad) - has been in the news of late.

The news is that many insurance companies are getting tough with fronted policies. In fact, several high profile insurance companies have recently stopped accepting fronted risks. And on Saturday a Moneybox programme on Radio 4 (you can currently listen to it here) covered the issue, and has prompted a heated online debate on fronting.

The most worrying thing from a young driver's point of view was the mixed messages coming from companies like esure. Despite the fact that esure currently allow the purchase of a fronted policy, their spokesman said:

"Any act of deception to try to get a lower insurance premium with your insurance company is tantamount to fraud."

If I were an esure customer insured in my mum's name, I would be very concerned about a statement like that. It suggests that if you were to make a claim, you could be in serious trouble. And as if to underline that the whole industry is clamping down on the practice, the head of the Association of British Insurers (ABI), Nick Starling has recently commented:

"Insurance cheats are more likely to be caught than ever before. And cheats will pay a high price as future insurance and credit will be more expensive and harder to obtain."

And don't bother running to the insurance ombudsman either if you're refused a claim over fronting. Says Peter Hinchcliffe, lead insurance ombudsman:

"If you are the parent and you have said you are the main driver and the car has been in an accident, or stolen, at your son or daughter's university, you have got a lot of work to do to explain how that has come about."

So what's the solution?

At Adrian Flux the problem of fraudulent fronting is simply not an issue for our customers. We do not accept any risks that are, or appear to be, fronted. We always rate our insurance quotes based on the highest risk driver, which, the statistics show, is usually the youngest.

If all insurance companies took this line there wouldn't be a problem.

If there were no fronting, there would be benefits for everyone. All middle aged drivers would get lower premiums, because their statistics wouldn't include so many claims by their children.

And believe it or not younger drivers might wind up with a cheaper premium too. No, really. Being insured on your parents policy is all well and good, but the problem with this is that you do not accrue any no claims discount of your own (see note)*. Since no claims discounts are pretty hefty for younger drivers, you could well end up paying less over a period of a few years simply by getting your own policy.

But if all this hasn't been enough to convince you that fronting is a bad idea, then please read this informative post on fronting from the Max Power forum.

Here are some tips for cheaper young drivers insurance:

• Do Pass Plus, IAM or Max Driver - that will save you up to 40%.
  
• Think about insurance when you buy your car - one of our top 10 cheapest cars for young drivers might be for you.
  
• When you get a quote always answer all questions truthfully, otherwise you might be in hot water.
  
• Before you do any modifications, check to see what impact they will have on your premium. Believe it or not, some mods can reduce your premium, and we can offer modified car insurance to young drivers, but be aware if you're planning to fit turbos and a nitrous kit to your Corsa, your quote may well be beyond your budget.
  

*Direct Line do of course advertise named driver No Claims Discount, but in practice this may not be transferable to other insurers, so you could find yourself stuck with Direct Line when you decide to take out your own policy. You might be happy with this but bear in mind that many people think that the real reason that Direct Line hate comparison sites is that Direct Line's prices are simply very expensive when compared with other quotes!

Top Ten Cars for Teens - Cheapest Young Driver Insurance

There's no getting away from it. Car insurance for 17 year olds is expensive. The simple fact is, the youngest drivers on our roads are, on the whole more dangerous, owing to their understandable lack of experience behind the wheel.

But if you are a young driver, there are things you can do to help yourself. First off, do an advanced driving course, like PassPlus, IAM, RoSPA or Max Driver. By getting extra skills and experience, you'll be making yourself a safer driver and young drivers will save much more than the cost of the course on their first insurance premium.

Second, take a limited mileage policy if you can commit to driving less than, say 3,000 or 5,000 miles a year. This will save you money, and is a more convenient way of getting a discount than installing a "Pay as You Drive" black box into your car, which is just a high tech way of charging less for a limited mileage anyway.

Joining an owners club can drop your premium by up to 15%, parking your car in the garage will probably save you more than your dad, and fitting an alarm will bring down the premium too.

So far, so good, but there are some factors you can't, or are unlikely to change. You can't make yourself any older, and you probably don't want to move house just to get cheaper car insurance. So that leaves the car that you choose as the main factor in determining the price you will pay.

So what is the cheapest car to insure. We did some research and the result may surprise you.

The cheapest car to insure, for a teenage driver, is, by a country mile, the classic VW Beetle. Other classics have also done well, with the Classic Mini coming in 5th and the Renault 5 in 9th, but it's not just a list of bangers with respectable modern motors like the Vauxhall Corsa, Peugeot 106 and the quirky Vauxhall Agila all doing very well.

Of course, not all classic beetles are all that old - production continued in Mexico and Brazil right up to 2003, and some enthusiasts import these to the UK enjoying the classic Beetle styling and air-cooled power, with a few (slightly) more modern creature comforts. Check out mexibugs, for more details.

And you know where to come for classic beetle insurance!
And for young driver insurance too!

Here is the list of cars, you'll notice that almost all of them are low powered 1 litre engines - if you go for a more powerful car too soon, your premium will accelerate faster than your car, for example, if that Renault 5 at number nine were the turbo version, the premium for a bloke would be £4,000, so watch out. All the quotes below are for Third Party Fire & Theft Cover for a 17 year old driver living in a moderate-to-low risk area and assume the car is valued at less than £5,000.

Car model/engine size	Male	Female
(1) Volkswagen Beetle (old shape, up to 1600cc)	£932.00	£714.00
(2) Vauxhall Corsa 1000cc	£1320.00	£1052.00
(3) Peugeot 106 1000cc	£1320.00	£1055.00
(4) Fiat Panda 1000cc	£1323.00	£1058.00
(5) Austin Mini 1000cc	£1325.00	£1058.00
(6) Fiat Uno 1000cc	£1330.00	£1058.00
(7) Citroen Ax 1000cc	£1334.00	£1060.00
(8) Peugeot 205 950cc	£1334.00	£1060.00
(9) Renault 5 1000cc	£1336.00	£1060.00
(10) Vauxhall Agila 1000cc	£1336.00	£1060.00