You may not think that the world's longest running soap opera Coronation Street would have an important tale to tell about car insurance - but that is exactly what occurred in a recent episode.
As part of the storyline, the 18-year-old character Amber was seeking her first vehicle. Knowing that car insurance costs would be high, her father's girlfriend Tara offered her the chance to drive her red VW Beetle while keeping the insurance policy in the 25-year-old's name.
Certainly there could have been significant savings by taking this approach. Tara would currently pay between £2,000 and £4,000 a year depending on her claims history - however, if the policy was put in Amber's name that cost would leap to more than £5,000. So, on the surface it seems leaving the car in Tara's name is a sound financial approach.
However, while it might seem like a good way to save money, fronting a policy on a youngster's behalf is illegal. It is considered fraud in the eyes of the car insurance company and should an accident occur the driver would be potentially left with costs reaching tens of thousands of pounds to cover for her own car and a third party with no help from the insurer.
So if asking an adult to front a policy for you is both illegal and effectively a 'false economy', what can young drivers do to keep their car insurance costs down?
A legal approach would be to put the policy in the youngster's name but add an older, more experienced motorist as a 'named driver' on the policy. This could potentially cut premiums by around five per cent.
In addition, there are savings to be made by taking the Pass Plus course as soon as you pass a driving test - some insurers offer discounts of over 10 per cent for completing the course. Indeed there are several insurers that also offer rapid bonus no-claims discount schemes meaning that you could build up a full year's bonus in just nine or 10 months.
Youngsters looking for cheap car insurance should think about the vehicle they drive too. Picking a high performance car with a large engine will drive car insurance costs up so be sensible with the first vehicle you choose.
Article Source: http://EzineArticles.com/?expert=Alex_Gregory
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