When you have only recently passed your test and now proceeded to look for insurance that is legally necessary for your car, it's understandable if your face drops at the sight of the quotes. Many insurers are reticent to offer their best deals to young drivers due to the risk this would pose.
However, all the same, you might be eager to find ways of trimming the quoted prices. When you apply for a quote through Call Wiser, we will ask for basic details about you as a driver - including your name, age and home address. Here, could you cite your parents' address to get cheaper insurance?
You might have heard conflicting messages about the extent to which your parents can help you to save money on car insurance. Much communication about the rules and regulations of car insurance can, it seems, be based on hearsay - but we are here to set the record straight for you.
If you still live with your parents, then naturally, their home address will be yours, too. For that reason, it is not merely a good idea, but actually essential that you give your parents' address in your application for a quote. Policies on which your home address is registered wrongly could void the cover.
This is also the case if, when first taking out a policy, you lived with your parents but have since moved to a different town, city or even just house. Your residential address hugely impacts insurance prices due to factors like crime rates and flood risk having more influence in some places. So, if you relocate from your parents' sleepy suburb to a much more bustling town centre, but don't change the address registered on your car insurance policy, you would be incentivising your insurer to reject any claim you subsequently make on that policy.
Don't think that your insurer will never find out, either. The Mirror cautions that, by deploying their investigative departments known as special investigations units, insurance companies can, when you issue a claim, pick up on whether you have made an address switch but not reported it.
Let's assume, for a moment, that you do share your residence with your parents and, thus, can put their address on the policy. That's all fine so far, but could you go a little further and name them as a driver on the policy? This is another point on which you might have received contradictory advice.
It can't be denied that car insurance costs are significantly lower for people who are aged over 25 and have a long no-claims bonus. Since your parents might each tick both of those particular boxes, would it be wise for you to name one of them, rather than you, as the registered keeper?
The answer depends on whether or not you truly will be the insured car's main driver, as honesty and accuracy are key. If you will drive that vehicle only occasionally while the parent uses it much more regularly, such as for commuting, the details on the policy must reflect this.
Instead presenting yourself as the main driver and the parent as the occasional one, contrary to the truth, would be an illegal practice called "fronting". If you are found to have been fronting, you will be denied any claims under a policy that will be immediately cancelled.
Furthermore, as fronting is a form of insurance fraud, it could land you in court, not to mention fines potentially reaching £5,000 and 6 penalty points on your driving licence. Unfortunately, many drivers might be unaware that fronting is illegal or even what the term "fronting" means.
Many well-intentioned parents have used fronting - assuming it to simply be "savvy" rather than flat-out illegal - in an attempt to save their offspring money on car insurance. Perhaps unsurprisingly, financially hard-pressed students can be particularly tempted by fronting their chosen insurance company.
The Guardian cites one genuine - and typical - case of fronting brought to the attention of the Financial Ombudsman Service. One woman attempted to make a claim after her son, when trying to park "her" car near his university hall of residence, hit a stationary vehicle.
The woman said that her son had "been parking in the same spot every day for months" and that it was "particularly annoying it had happened on the last day of term". These comments led the insurer to reject her claim. The woman thought this unfair, but admitted to "lending" this vehicle to her son for use at university and claimed never to have heard of "fronting".
However, when she had applied for the cover, the insurer had - as publicly revealed later due to this company's recording of the phone call - asked successive, clearly-worded questions establishing that her son would use the car only "very occasionally" and not be the main driver.
As a result, the ombudsman, convinced that the woman had not sufficiently clearly indicated how the policy was to be used, ruled that this was a blatant instance of "fronting".
Research highlighted by the Money Advice Service has revealed a quarter of parents to be, in their own name, insuring cars actually primarily driven by their 16-25-year-old offspring. This is a worrying trend, but there remain legal ways of lowering the cost of car insurance for younger drivers.
It's still legally permissible to add your safe-driving parent to your policy, but as an additional - not main - driver. As this could reduce your outlay necessary for premiums without violating the law, it's possible that some people have confused it with fronting and so assumed the latter to be legal.
Another good idea is opting for a vehicle in a low insurance group - as, with a high risk group you’ll encounter costlier premiums. You should also endeavour to drive carefully to avoid accidents that could adversely affect the cited premiums at the time that you are prompted to renew the cover.
You could even more effectively tap into the premium-busting advantages of safe driving if you choose a "black box" policy, whereby a telematics system will be fitted to your car to monitor your driving behaviour. Should good habits be recorded, the yearly savings could reach £800.
Another benefit of habitually driving safely is that, after every year in which you don't make a claim, your no claims bonus grows. After five years of claim-free driving, this discount could total 70% off your insurance cost. Therefore, it's well worth trying to keep a no claims bonus for the long term.
Still, with so many policies to choose from, you might wonder how you are supposed to find the time to keep approaching insurers individually as a means of sourcing the most value-for-money policy. However, it isn't required that you look for cover in such a cumbersome way.
Instead, you can start your search for car insurance by dialling Call Wiser on 0333 003 3270. We can speedily compare various quotes before settling on one that will deliver especially good return for the cost of the premiums.
Author: Call Wiser
Call Wiser is a trading name of Be Wiser Insurance Services Ltd. Registered in England No. 6097813. Be Wiser Insurance Services Ltd are Authorised and Regulated by the Financial Conduct Authority 465471