Car Insurance for 17-Year-Old $2,000 Per Year with RAC for a $14,000 Car. Should We Put The Car in One Parents Name?

Lstarfish12345 on 25/07/2022 - 21:03

My daughter is about to turn 17 and get her licence and we are buying a car for $14,000 (we currently only have one car in the family which is in my name - 49 yr old female). We were originally going to buy the car in her name and insure it in her name, but just got a quote for insurance from RAC for $2,000 per year because of her age. Are we better to buy the car in my husband's name (49-year-old male with clean driving record) where the same level of cover is just $500 per year? They have an age excess which would apply if she was driving and had an accident, and the policy includes cover for all drivers (don't need to be named).

Realistically we will likely all drive the car sometimes as it is a newer car/ more economical on fuel than our other car!

I was not sure if there were any other implications of her not having the car (and insurance) in her name, and if not - why anyone would put the car/insurance in the name of a young driver. She is very cautious, and we are not concerned about fines etc.

The no-claim bonus with RAC appears to be based on the number of years driving without having a claim, not based on the number of years holding an insurance policy in her name.

Also - if you have any recommendations for insurers who offer good value for any driver or young drivers - please advise!

Automotive Car Insurance Insurance

Comments

  • CheapskateQueen on 25/07/2022 - 21:07
    +3

    my car was insured in my dads name forever for this reason. although I never made a claim for an accident so not sure what impact it wouldve had.

    • starfish12345 on 26/07/2022 - 09:55

      Seems to be more commonly done this way than I had realised. Makes me feel a bit better if we go this way.

    • UnternamenBernhard on 26/08/2022 - 02:29

      You'd be a designated driver or if Dad was feeling vindictive- you'd taken the keys without his permission and thus not covered under his plan but one that would pay out with a higher premium. Happened to me. No regerts thuogh. Dr said I might have brain damage.

  • AndyC1 on 25/07/2022 - 21:20
    +1

    Do some more quotes with different options like named drivers including daughter and see if it has cheaper options in an accident. Chances are that she will have an accident and as such it may be worth getting her included as a named driver. Another option is to include the "No claim bonus protection" just in case.

  • GrueHunter on 25/07/2022 - 21:36
    +6

    The value of the car doesn't mean much. It's the value of the other car(s) she might hit, their medical bills, and yours.

    • sjj89 on 26/07/2022 - 00:31
      +6

      Medical bills are all covered by state imposed insurance tied to registration

    • starfish12345 on 26/07/2022 - 09:54

      I guess that makes sense, I looked at the cost of 3rd party only and that was up there too! Probably also the huge cost of panel beating doesn't help.

      • UnternamenBernhard on 05/08/2022 - 01:35

        No one beats panels any more- though with the continual thinning of the steel I don't see why not. Cheaper just to replace with secondhand and respray to match, I guess.

        • Euphemistic on 05/08/2022 - 09:40
          +1

          Thinner steel is harder to get straight/smooth when working it. It’s too easy to deform too much.

  • SlowCarSlow on 25/07/2022 - 21:39
    +3

    Well you started with buying a car and putting it in her name, then in that paragraph you mention that you and your husband intend to drive it a bit as well. I'd say get everything in your name / your husbands. But don't be surprised when you end up using the car a lot and you kid buys another car so they don't have to worry about whether mum and dad have taken the car or not.

    If it's really just for your child to use then get everything in their name. Do they have a job? Do they want a car? Are they willing to pay the yearly costs? If not, then it's really just your car isn't it?

    • starfish12345 on 25/07/2022 - 22:07

      She works a few hours a week. She is contributing to the cost of buying the car. She does want a car. She will have use of it whenever she wants to drive somewhere and will cover the fuel cost when she is using it, but she is still at school so we will cover the insurance, registration, and servicing until she finishes school and can work more hours (she spends a lot of time on homework as wants to go to uni). We will only use it when she is not using it or if we are going somewhere together. When she moves to the city in 2.5 years to go to uni she will take it with her!

  • altomic on 25/07/2022 - 21:41
    +2

    following - I'm in the same boat (not literally i.e. I don't need boat insurance for my boat for my 17 year old to pilot it, but insurance so my car so my daughter can drive it. - just did a quote and my comprehensive insurance jumps from $350 to $1100)

    • altomic on 25/07/2022 - 22:00
      +1

      just checked my insurance PDS (coles) there is a $400 additional excess for inexperienced drivers (on top of the $850 excess)

      • starfish12345 on 25/07/2022 - 22:18
        +1

        Ours has a $650 age excess for under 19 year olds, but it was the 400% increase in the premium if we insured in her name that concerned me more! Who do you use for insurance?

        • altomic on 25/07/2022 - 23:16
          +1

          coles

        • UnternamenBernhard on 26/08/2022 - 02:31

          Allianz Comprehensive all the way. Served me well in UK, Indonesia, Singapore, Germany, now Mick Dundee land. The "smaller" insurers are just selling wholesale insurance with fewer trimmings (7-day rental car etc) from the big boys. Just like banks and mortgages. Or travel agents selling blocks of plane seat allocations.

  • Euphemistic on 25/07/2022 - 21:52
    +4

    Register and insure in parents name for a few years at least especially if it is going to be a share car.

    Make sure you read the policy PDS. Daughter may need to be specifically listed as a driver - especially with the cheaper insurers.

  • Boioioioi on 25/07/2022 - 21:56
    +1

    Put it in your partners name, but add your daughter as a driver so insurance knows. Read the policy carefully and check with them on the phone.

    You will have a higher excess if anything happens while your daughter drives because of her licence type and her age. But you cant avoid that anyway. Great idea to put it in husbands name.

  • SnowDragon on 25/07/2022 - 22:00

    $14,000 car
    17 year old

    Buy her a $2-5k car and get her a minimum wage job so she actually understands how hard it is to live.

    What happened to kids purchasing their own cars and paying for expenses themselves? I paid $1,300 for my first car 10 years ago. God knows what insurance was - probably $500 for third party, but I still forked out for it.

    • starfish12345 on 25/07/2022 - 22:16
      +8

      We did think about that but we live in a regional area and don't want her driving an older car that would heighten the risk of her breaking down when driving 3.5 hours to and from the city every few months once she goes to uni. The safety improvements of newer cars is also important to us. She does work (and has done so since she was 14) and is very good at saving money and will be contributing to the cost of buying the car, she just doesn't have a lot of spare time to work more hours at the moment due to her sport and studies which is why we plan to help with the running costs for the first few years.

      • UnternamenBernhard on 05/08/2022 - 01:56
        -2

        Sport? That's a luxury and a frivolous waste of money. Get her to pay attention to what will get her employed- education and skills.
        The safety improvements are not enormous in the past ten to fifteen years to today. What has happened is the massive price reduction differentiating European luxury features to being found on as stock or optional on even sub $30,000 new cars. Features such as seatbelt pretensioning, emergency brake assist, curtain airbags, lane assist, stability and traction control, auto collision emergency dial, now some makes have collision data boxes. Singularly ABS has been near standard for years- the single most important safety feature as it reduces braking distance and lessens the uncontrollability of a braking car (those who can recall the bad old days of having to acquire skills to drive heavy British rear-wheel drive lumps well over speed limits in rain with locked wheels, steering using the throttle).
        Maybe an early 2000's Volvo is better- buy from a dealer.

  • resisting the urge on 25/07/2022 - 23:33
    +1

    At 17, my 15 year old V8 Falcon would was a mobile battering ram.

    I drove it with care, but had it hit anything, they'd have been toast. Like it was made from a single iron ingot, even the bumpers were impervious to all things.

    My Third Party Property insurance was triple what my bosses' comprehensive policy was, and he had a near new targa-top 911. My car was worth a few thousand at best. His Porsche, over 120k.

    Insurance is not fair, but these days, like the NSW gov's fines and the cops attitude, its a perfect storm for younger drivers. Now, they either drive like pensioners, or go broke on the way to learning how.

    Why not teach people to drive, make them pass a bar that includes learning about accidents, why, and how best to avoid them. Without that, a certain number of people will always fail, and worse, die trying.

    • cashless on 26/07/2022 - 03:12
      +1

      but had it hit anything, they'd I'd have been toast

      FTFY
      No car would survive a head-on impact at speed and a large engine propelling it's way through the passenger cab would certainly maim or kill

      • Cluster on 26/07/2022 - 09:19
        +1

        Indeed. People still have this image that a Falcon from 1975 is 'tough' and would do much better in a serious collision than a modern car that 'crumples like a coke can'.

        It was the realization that making certain areas of the car crumple and fold that greatly increased survivability for passengers.

        • resisting the urge on 26/07/2022 - 09:50

          I didn't say anything about the occupants of my car. But if we must go there… of course by today's standards serious collisions would have been a bad outcome for them, as well as the driver: In the 80s, only the latest cars came with crumple zones that really worked, and air bags were not a thing until much later.

          So at the time the mentality of driving a brick wasn't that far wrong- most of the crumpling in an crash would be borne by the weaker vehicle (it's a fact that most of the collision energy dissipates in the weaker metal). So I happily stand by my point that it was a tank and would likely go through things, let alone push them, out of the way as it simply had more mass. Now given I had a steering wheel and collapsible column to reduce injuries a little, I'd even be likely to walk away from a serious collision with most cars. The other parties however…

          It was a really a low, 1750kg tank. At the time most cars had far less metal than they do now (ANCAP added a lot of structural strength in the late 90s), so outcomes from serious collisions would be different then, to what they would be today. However for anyone in an SUV or a 4WD, a lot of collisions result in extraordinary outcomes as they have a propensity to roll unexpectedly during high speed swerves, and even at low speeds when hitting gutters and low objects- this really upsets an occupants' chances of walking away without catastrophic injury even with air bags all over. Making the case for driver training even more important.

          • UnternamenBernhard on 05/08/2022 - 02:10

            @resisting the urge: Fords heavy and tinny- most of the weight was the cast iron block and heads if not the 1930s live rear-axle and same old diff they'd used for 50 years. Proper steel- buy European. I was involved in a fatal collision in a 1971 Rover P6B vs a 2000 Commodore. I wasn't the one killed (nor at fault), it was unfortunately a write off by virtue of too expensive to return to spec vs market value. Rover having pioneered the "safety cell" before Mercedes with a structural monocoque (all panels were unstressed bolted onto a sub-frame like a Porsche)- unlike generic cars like Fords being a minor upgrade of body-on-chassis that depended on stressed panels- ie welded roof and C-pillars and rear mudguards and windscreen as structural component). Then very few Australian panelbeaters (they really did beat them, back then) had monocoque chassis alignment skills or jigs. Rover 1971- 4 wheel disc brakes, all independent suspension, all-alloy engine, safetycell, crush zones- all on a shoestring budget and they were researching an ABS which only Jensen had at the time. What was the 1971 genero-car Ford like? Antique.

    • starfish12345 on 26/07/2022 - 09:59

      Couldn't afford the fuel for that these days!!!! Agree with your point regarding driver training - I think most of us could do with a good defensive driving course!

  • MeesusEff on 26/07/2022 - 00:15
    +1

    My husbands car is still insured under my dad's name 😂 I did put him down as secondary driver recently, added like $70 to the total

  • chrisn26 on 26/07/2022 - 00:15
    +1

    One thing to consider if putting insurance in the name of a parent is if the child makes a claim there's often a huge excess (for not being named and/or under 25 or whatever arbitrary number). As soon as you list an under 25 on the policy the premiums go through the roof.

    Is not having an extra car an option? So for example, can a car be shared among family members?

    On a side note, I wish I had a $14k car today, let alone at 17.

    • starfish12345 on 26/07/2022 - 09:52

      We will likely use it sometimes till she moves to the city for uni in a couple of years. Wanted her to get something that would last for the long term (we have had our car for over 13 years and it is still going strong)… but will give some thought to buying it ourselves and just letting her use it.

  • Benoffie on 26/07/2022 - 07:13
    +1

    Isn't this what everyone does? Except buy a $14k car?

    Ours got a $3k Suzuki Swift hand me down from Grandma. Insurance is just Fire and Theft as we're driving it maybe twice a week. $300 odd a year.

    • pjetson on 26/07/2022 - 08:18

      Have you tried to buy a used car lately? A $3K car doesn't really exist any more. Double the price of everything that you think you knew.

      • Benoffie on 26/07/2022 - 19:48

        I just bought one. 3k. 2009 Suzuki Swift.

        They are around, people just have to look.

      • UnternamenBernhard on 26/08/2022 - 02:33

        try Grays Auctions, Trading Post, find a mate who knows a car dealer- they buy wholesale down the docks.

    • starfish12345 on 26/07/2022 - 10:03

      I would certainly go that way if she didn't have to do so many long drives between where we live in the country up to the city. But there is just not anything that looks remotely reliable around for a decent price at the moment.

      She currently goes to the city every fortnight to play sport (7 hr round trip) and halfway there 3 times a week to train which is a 3 hour round trip! Driving back at night we would not want her breaking down.

      • Benoffie on 26/07/2022 - 19:52

        Being in a similar situation previously,is that kind of driving something you want her to continue?

        The region I'm from, kids who drive to the metro outskirts for the train access etc are much more likely to be in serious or fatal accidents.

        Nothing to do with the car. No car will save a P Plater from a B Double or a LandCruiser. Just being realistic.

  • mskeggs on 26/07/2022 - 07:17
    +3

    My eldest recently copped a fine, had transmission trouble and has to renew insurance all at once. Cars are very expensive to run for a young person, and they are working full time.
    I’d suggest either buying a second car for your family, and allowing your kid to borrow it, but you pick the car to be economical etc.
    Or let your kid make their own choices and stand on their own feet.

    The straddling the fence option of subsidising their choices will be costly.

    • starfish12345 on 26/07/2022 - 09:46

      True! It will be tricky. Will make sure to give it more thought.

  • EightImmortals on 26/07/2022 - 08:28
    +2

    We got junior a car (well we loaned him money and he paid us back as he could) and it was bought/registered in his name. Facing the same high insurance premiums we put my wife's name on the insurance policy along with our sons (at the suggestion of the insurance company) . That got the premiums down and because his name is on the policy he now has an insurance record for when he turns 25.

    • starfish12345 on 26/07/2022 - 09:48

      Interesting that is what the insurance company suggested - you must have got lucky with a good human on the other end of the phone! That is perhaps the way we will go. Thanks!

  • Love a bargain on 26/07/2022 - 12:28
    +1

    Also think about whether she will still want her car to be in her parent's name when she is much older. (No point paying stamp duty to transfer a car between family members IMO.)

    Another thing to be aware of is that the insurance policy holder doesn't need to be the registered owner of the car.

  • md333 on 26/07/2022 - 12:41
    +2

    There was an interesting presentation on the ABC radio science show about driver safety a while ago, that pointed out that young people are statistically much less likely to have an accident driving their parent's car than their own car.
    Not sure if it entirely holds up if you deliberately decide to have a car you let them drive, rather then buying there own, but does seem to make some sense. A little bit extra in favour of making it your car that they can borrow rather than their car.

    Insurance may have problems with them being an unlisted driver if they are really the primary driver of the car though.
    RACWA have very good conditions on unlisted young drivers.

    • starfish12345 on 26/07/2022 - 21:42

      I will have to look that up - sounds very interesting and a compelling reason as you say! I was hoping to stick with RAC as they are pretty good to deal with… will look into it a bit more with them. Thanks.

  • garffi on 26/07/2022 - 16:31

    Car is registered under my name but insurance is with AAMI under my parent's name. As long as they cover under 25's, I think you'll be fine.

    I was planning to put the insurance under my name once I turned 25 but it didn't make much of a difference and was still very expensive. So it'll be under my parent's until it gets cheaper for me.

    • Euphemistic on 26/07/2022 - 16:40

      There is no magical age where suddenly your premiums drop. It’s a sliding scale of risk - until you get old where the risk can increase, but is offset by generally driving less.

      • garffi on 26/07/2022 - 17:55

        Yeah, I thought 25 was the magic number since it seemed like that's what insurance companies focused on. I think you'll see premiums drop the most by moving to a different suburb. I messed around with the postcode and it was cheaper by a few hundred dollars. My suburb is unfortunately a 'high risk' area :(

        • Love a bargain on 27/07/2022 - 16:42

          25 only seems to be the cut of for having to pay extra excess when you do need to claim

      • md333 on 27/07/2022 - 00:32

        Adding my elderly father in law to my policy as a listed driver actually reduced the premium for me. Doesn't seem to make any sense to me as I'm still the main driver, but I'm happy to pay less.

        • Love a bargain on 27/07/2022 - 16:45

          I was amazed the first time I heard/ found out about it too. Adding a female adult (old enough for age not to be a liability, but younger than the male main driver) as a named driver to a policy reduced the premium. Go figure. Maybe you should try adding you wife/ mother/ MIL next time and it might get even cheaper.

          • md333 on 27/07/2022 - 17:26

            @Love a bargain: Doesn't even need to be a relative or even someone you know. I might try adding the Queen on my next renewal.

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