Go Compare insurance has found that almost a quarter of parents could be risking a trip to court and a criminal record for ‘fronting’ their child’s car insurance policy.
‘Fronting’ is when an older or more experienced driver – usually a parent – claims that they’re the main user of the car but it’s mostly driven by a young person, or other high-risk motorists, to reduce the cost of car insurance.
The research, commissioned by GoCompare, surveyed over 1,000 parents of children aged between 17-25 who were either learning to drive or were a young driver. When asked about their child’s car insurance, 23% said that the insurance for their child’s car was in their – or their partner’s – name and the child was named as an additional driver, which is technically insurance fraud and therefore illegal.
Ryan Fulthorpe, motoring expert at GoCompare, said on the statistics, “Unfortunately, parents are often unaware that fronting is insurance fraud and therefore illegal, so they could end up with a policy that’s null and void, as well as a criminal record.
“Fronted policies are often discovered during the claims process when the insurance company will look at the details of an accident. If they find that the main driver wasn’t the policyholder, then it can mean that the parent is liable for the costs of that accident, as the insurer will try to recoup any third party costs that they have paid out.
In Wales, 41% of parents whose children have their own car said that the car insurance was in their name, making it the area with potentially the highest number of fronted policies. And over a half (56%) of all parents across the UK said that they’d consider putting themselves as the main driver to save money on a car insurance policy.
Ryan added, “The findings from this survey are worrying as we’ve seen the numbers increase since we last asked the same question in 2019, when one in 10 parents said that they had declared themselves as the main driver**. Whether this increase is due to financial concerns following the pandemic, or that more education needs to be done about fronting, is not clear.”
The average cost of a car insurance policy for a 17-19 year old is £871.94 according to GoCompare data. The survey also revealed that, for the first time, the cost of car insurance was the top concern for parents when it came to their child getting on the road, over safety and other concerns.
The cost of running a car for young drivers has plummeted by £536 year-on-year, primarily driven by lower fuel and insurance costs, according to comparethemarket.com’s latest Young Drivers research.
On average, a 17 to 24-year-old driver will now pay £1,737 to run a car in the first year – the lowest annual running cost since this research began six years ago.
The cost of driving had been rising in recent years, almost to the point where it would be unaffordable for many young people. But since the start of the pandemic, the declining cost of insurance and fuel has eradicated the increases seen in previous years, according to the research, which analyses the cost of insurance, fuel, road tax, and breakdown cover.
The dramatic decline in insurance and fuel costs in the first six months of 2021 have been caused by young drivers slashing the average annual mileage that they are insured to drive. Young drivers are only insured to drive for an average of 3,541 miles this year, down from 7,347 miles the previous year. As a result, a young driver’s typical fuel costs have fallen to £416, dropping £453 year-on-year – despite a recent increase in the cost of petrol.
Car insurance is still responsible for more than half of overall car running costs (61%). However, this cost has tumbled in the past year as the pandemic has reduced the number of cars on the road.
The average annual car insurance premium for young drivers now stands at £1,062. This represents a significant £120 (10%) drop from the first half of 2020. When the typical cost of buying one of the most popular cars for young drivers is included, the total cost of getting a young driver on the road is £4,633 – a £2,145 decline year-on-year.
Despite the fall in the cost of car insurance, young drivers shouldn’t be tempted to auto-renew when their policy ends. The cheapest annual premium typically available has also dropped to £885. This means young drivers could save an extra £178 if they shop around for a better deal rather than automatically renewing their policies.
Ursula Gibbs, director at comparethemarket.com, said, “Following lockdowns and working from home, many young motorists have drastically reduced how many miles they will drive this year. These young people will be comforted that the cost of driving has fallen as a result. The steep drop in costs will hopefully ease some of the financial strain many young people are under – and prevent driving from becoming prohibitively expensive.”