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Why Can't Teenagers Insure Their Own Cars?

Why Can't Teenagers Insure Their Own Cars?

Tags: Insurance
Last updated by Kayley Harris on

I have two teenage sons. They have very different personalities. One is happy to wear department store clothing, the other likes designer brands. One is a clean freak, the other is messy. One eats well while the other eats rubbish most of the time. One has bought himself a car, a bomb that cost $1900. The other son bought his first car this week at a cost of $4500, complete with spoiler, mags and other modifications.

As we all know, the cost of the vehicle is only part of the deal. There’s the registration transfer, stamp duty, CTP and the REV Check.  That’s after the cost of the written test, learner’s test and driving lessons. Then there’s the insurance…

I tried a comparison website and found that if the driver is under 25 years old, there is no insurance coverage available. Our only option was to purchase the car in his father’s name, along with the insurance policy and nominate our son as a driver. This means an excess of $2000 if he has an accident.

CANSTAR examined the cost for P-Platers paying for their own insurance, compared to the cost if you are insured on Mum and Dad’s policy and they found that it’s often cheaper to just contribute towards Mum and Dad’s family policy for them to include you as one of the nominated drivers in their car insurance policy. The family policy premium does increase when you add an under 25 driver to the policy, but not by as much as a normal adult premium increases if the driver is under 25.

Statistics show that as you age and gain more experience in driving, your risk of being involved in a car crash decreases every year. According to the Transport Accident Commission, drivers in their first year on the road are four times more likely to be involved in a serious or fatal accident.

The unfortunate news for young men is that statistics still show that males are more likely to be involved in a car crash that writes off the vehicle. 80% of drivers who die because of speeding are male, and 1 in 3 drivers involved in a speeding incident or a crash are men aged 17-25 years old.

It seems bizarre to me hat we have to effectively lie to our insurance company by putting our name down as the owner of the vehicle (and policy) when in fact it’s my sons’ car and he will be the only driver. What message does that send to him?

Canstar reference: https://www.canstar.com.au/car-insurance/will-car-insurance-cost-first-hit-road/

https://www.tac.vic.gov.au/road-safety/tac-campaigns/young-drivers

Any advice given is general in nature and does not take into account your individual circumstances and needs.

Originally posted on .

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Darryl
Darryl from QLD commented:

Briefly, this worked for us. When our boys got there licences we offered a financial incentive if they did not lose there licences or ended up in hospital for any car related incident(getting into another car with a friend who may have been under influence) up to the age of 21. My wife & I slept a lot better at night through those teenage years & we did take some points for them. Yes, at least I'm honest. 

elizabeth
elizabeth from VIC commented:

When my daughter got her learners we purchased a car in her name and had 3rd party property. Car was on $2000 so no big deal: By the time she got her licence she had 2 accident free years and was a "good" risk we kept the 3rd party going until she could purchase her own car. This way cost has never excessive. Liz 

Someone
Someone from QLD commented:

I will be very keen to hear replies to this. I have two teenagers who I would very much like to give some independence. They would not be able to afford to drive if we didn't have them on the family policy. Driving in my mind is an essential skill in the modern world (not essential like food of course). Look forward to hearing some dialogue from others on this topic. 

Ian
Ian from NSW commented:

I see a couple of issues with motor vehicle perception and insurance today. We are a car loving family and have 3 daughters who have all purchased their own cars. Each of them now have the vehicles in their own name but their first cars were in my name with them nominated as a driver. None of them ever made a claim. Two of them drive what is referred to as a respectable car (mini and stock Lancer) one has a Mitsubishi Ralliart with Sports wheels and exhaust. They sometimes share their cars and it's always the Ralliart that is stopped. My 50-something wife had an orange Mitsubishi FTOI and was always being stopped sometimes 3 times in one day. And she was followed by police multiple times. Oddly their first question was always.... Is this your car.... She swapped it for a white one and hasn't been stopped since... 

Andrea
Andrea from QLD commented:

My 19rs old son took out a personal loan to buy his car and he could only insure it in his name. The good thing is it's registered in his name and insured in his name (cost him $1500 on his apprenticeship wage). He paid it off in 6 months as he's a good saver and didn't like the idea of pay interest to the bank and now has an excellent credit rating and is very responsible with pay his rego and insurance and looking after his car. His mates all have bombs and he is very proud of his achievements. 

Tom
Tom from ACT commented:

This article is curious. My son had no trouble getting insurance as a teenager in Canberra. We shopped around and found a premium with a major insurer that was tolerable. A year or two on and he had an accident for which he was at fault, and his car written off. He bought a brand new car and again got insurance without a problem, this time with a different company. 

Margaret
Margaret from NSW commented:

Had the same problem with a grandson, hence no insurance which is a concern, forgot to register it in dads name and would have to pay the transfer fee to do so, again a sensible 19yr old. but I agree that a lot of this age bracket are bad drivers. 

Cassandra
Cassandra from QLD commented:

Totally agree. Insurance companies make it cost prohibitive for them to insure a vehicle on their own thats if you can find a company that will actually insure them. An option would be to add them as an extension to your policy which means an increase in premium but the addition person is actually listed as a seperate driver. This is a concept that is practiced by some private health insurer's. 

Toni
Toni from QLD commented:

If one has bought a skyline well beware they are always picked on by the cops even if they aren't doing anything wrong. The cops put them in a different category as they class them all as hoons even if the kids only buy them as they love the look of them. My daughter had one and was picked on all the time, even on the way to work she was pulled over for a car check drug check and alcohol check, they went over the whole car and wasted a whole hour of her time, needless to say she was late to work. She sold it in the end but still misses it, she has a ford now and doesn't get pulled over anymore. 

Someone
Someone from TAS replied to Toni:

Well, Toni, the owners of these cars, and many like them, are "picked-on" by the police because they feature heavily in accidents, burn-outs and drag racing on public streets and are generally owned by undesirable elements. 

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