Top Gear car insurance advice crashed

During Sunday's show the team of Clarkson, May and Hammond looked at buying a car for young drivers and the costs of insurance.

In one case the insurance policy for a young driver was 15 times more expensive than the value of the car.

The show found the cheapest way for young drivers to get insured was on their parents' policy as a named driver for occasional use.

However, Hayley Parsons, chief executive of Gocompare.com, has criticised the show for leading parents into fronting – the practice of insuring a child's car in their own name, then adding their child, the real main driver, to the policy in an attempt to keep costs down.

James May stated on the show: "It soon dawned on us that the only realistic way of getting covered when you are 17 is by going on your parents' insurance. So we got back on the phones pretending to be dad."

Ms Parsons said: "While few people would take Clarkson's suggestion that a sex change could help 17-year-old boys halve their premiums seriously, fronting is a common fraud and we would urge parents to avoid the practice as, if found out, the consequences could be severe."

After the feature on finding a car for a young driver, Richard Hammond said: "Can I just point out before we do move on; if you do decide to put yourself on your parent's insurance and you have a crash, and the insurance company find out that it wasn't really your car, they won't pay out.

"Then they can prosecute you and you might have to go to jail."

Gocompare warned the effects of being caught fronting can last longer.

"Where this fraud is exposed, insurers have the right to cancel the policy or charge the correct premium as a lump sum," Ms Parsons said.

"Drivers who have had a policy cancelled will have to declare this on any future applications and will find it harder and more costly to buy insurance because the majority of insurers would refuse them cover."

She added in the long run it is better for young drivers to hold insurance in their own name to build-up a no claims discount.

Tips on cutting car costs for young drivers

• Generally, the lower the engine capacity, the lower the premium - ideally an engine size of less than 1200cc is best.
  Also, avoid models with letters after it, for example ‘i', ‘sxi', ‘gti' or ‘xl'.
• Avoid vehicles with any modifications from the standard manufacture.
• Consider taking the Pass Plus training course which is designed to give new, young drivers additional practical driving experience. Once completed, the course normally entitles drivers to reduced premiums.
• Shop around for your insurance - don't settle for the first quote you are given.
• The cost of taxing a vehicle can also vary, depending on the CO2 emissions that it produces. The lower the emissions, the cheaper the cost of vehicle tax.

Dangers of No Car Insurance

In these tough times, many of you may have taken double, even triple looks at the monthly budget to see where some extra savings can be trimmed out.

According to AAA, more and more of you are taking the savings out of your car insurance- something just about everyone will tell you is a bad idea.

AAA Insurance is finding that many Virginians are cutting back on auto insurance deductibles as a way to save money, but are actually setting themselves up to spend much more in the long run.

As the summer months roll in and more and more people are out on the roads, there's a warning out that many of these drivers are turning up uninsured as a way to save money, which could set those folks up for a major disaster in the event of even a minor accident.

Paul Scott said he had no idea his insurance had lapsed, meaning his little fender bender could end up costing big time. "I might be paying their deductible and now the Virginia's $500 uninsured motor vehicle fine, then I have an accident on my record which will make my premiums go up," Scott said.

And that's just for a minor accident with no injuries. Larry Fallen, with Fallen and Associates, has been selling insurance for 30 years. He says he hasn't had too many people looking to cut back on their insurance and says that's a good thing, especially when you're dealing with liability.

"If you were to get sued in a court of law, you could lose your home, your life savings," Fallen said.

Consequences Scott can't afford, even though no one was hurt and the damage minimal. "This could cost me $1,000 easy in the first year," Scott said.

AAA is putting out some ideas on how to save, without putting yourself in financial jeopardy. First, ask your carrier about discounts, which are often offered with multiple policies. Second, increase the deductible. The higher the deductible, the more you save, just make sure you can afford it in the event of trouble. Third- adjust your coverage as your car ages. And finally, shop around, every year. That will keep your carrier on their toes and keep you in touch with rates that can and will vary.