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Rockwiz

Car insurance

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Rockwiz

DS17 - 18 in 4 months is about to get his Ps. He wants to buy his own car. We’re only a one car family as I don’t drive, so he will need his own car. He’s been saving up from his casual job, plus I have been putting aside money for the kids since they were babies to help with the cost.  First issue is finding a car which is not too old but not too expensive. That’s a problem in itself which needs its own thread.  But the biggest problem is the car insurance. I knew it was bad for under 25year olds but wasn’t expecting $2200 a year! We just did a dummy quote for a pretend 7 year old car and that’s what was quoted. How does your teen pay for car insurance if they’ve only got a casual job? I’m assuming most households have a second car so they let their teen use that car and so help them with the insurance? As DS says, with insurance and rego the cost will use up 30% of his annual earnings. Any advice?

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nom_de_plume

The rule in our household was we couldn't get a car unless we could afford to pay for the upkeep including petrol, maintenance, rego and insurance. Consequently I didn't have one until I was almost 20.

I guess most kids also had older cars (not necessarily the best from a safety point of view), and therefore only had extended third party insurance which was cheaper. I started driving in the early 2000's and most of my peers had late 80's early 90's Toyota Corollas, Nissan Pulsars or the like. 

The other thing that will be driving the cost up is that he's a boy. It used to be cheaper to have the insurance in the parent's name, and nominate the P platers as drivers, but I think they've closed that loophole. 

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tinselfoil hat

I don’t have a teen so no experience with this issue. However I have been in two accidents simply be being in the wrong place at the wrong time and my car helped my injuries not to be worse. I just wanted to commend you on trying to avoid an old clunker. I think if I was in the same position and could afford it, I’d pay the difference in insurance between 3rd party property,theft and comprehensive for a couple of years til he was on his feet financially. I know it comes from a position of privilege but I do think if he’s far better in a newer safer car than one so bad that he can afford not to insure it. 

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JuicyLife10

I know that some ppl own the cars in their names, rego them that way and then insure the cars in their names and add the kids as named drives, FWIW. 

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Expelliarmus

We pay the insurance at this point because she needs a car and can not afford the insurance. Otherwise I’d be driving her everywhere which would be impossible while having a job or life. 

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~LemonMyrtle~

Was that for comprehensive?

Id get a much older car, at least 10 years old, Around $5k, then just get third party fire and theft. 

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hills mum bec

DS19 only has third party insurance on his 20+ year old car as the quote for comprehensive insurance was more than what he actually paid for it.  Before he bought his own car, we had a 10yo spare car that he was driving and we had the insurance in my name with DS listed as an infrequent driver (defined as using the car 3 days a week or less).  When he got a full time job we said he would either have to get his own car or contribute towards the insurance upgrade.

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Murderino
Posted (edited)

Wow I just tested insurance on my car (a 5yo Corolla) if my kids were 18. 

For DD it was just over $2000 and for DS just over $2400. I’d never thought about it as they’re 10 and 8 but now I wonder how their cousins, who all had decent cars at 18, afforded the insurance. They must have just gone 3rd party I guess.

I am now remembering a friend bought a used imported sports car at 19 and was then shocked to find out the insurance was over $5000. The car cost her around $10k from memory. That was almost 20 years ago and I’d forgotten about it.

I guess I’ll be helping with insurance when the time comes. My insurer, AAMI, used to offer a discount for teens that had completed their defensive driving course but I can’t find that on their website.

 

Edited - found it in their Comprehensive Policy PDS 

“If you have AAMI Comprehensive Car Insurance and you, your children or your grandchildren are under 25 years of age, you or they are eligible for a free one-day AAMI Skilled Drivers course designed to improve driving awareness and competence. On completion participants will receive a discount on AAMI Comprehensive Car Insurance, until the first renewal on or after the age of 25 (available in Adelaide, Brisbane, Canberra, Hobart, Perth, Melbourne and Sydney). For more details refer to our website: aami.com.au”

Edited by Murderino

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rjflc69

My DS (now 19) has had insurance in his own name since the day he got his licence (17 years old). He purchased his car when he was still learning to drive and it was insured in my name and once he got his licence we changed it.  He has insurance through AAMI and they offer a free of charge driving skills day which if you complete gives you 10% discount on your insurance until you turn 25 (I think it is 25) as well as the added bonus of a free driving course (that he really enjoyed).  Both my husband and I are listed on his policy (as apparently this brings down the rate as we are  rating 1). He works a casual job and while he was still at high school we paid most of his insurance (he contributed a small portion) but once he moved to uni he took over the full payment (as well as all the other costs of running his car). We have found each year his premium has gone down and now paying around $115 a month for fully comprehensive insurance for a car worth around $10k with no at fault accident history, of course excess is hideous if he does have an at fault accident.

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~LemonMyrtle~

I remember 20 years ago, my first car was about 25 years old,  it cost about $1400 and didn’t have a working heater, but it ran Ok. I had third party fire and theft only and that was about $500- $700 I think (it increased over the years) it was about half the price of the car. And rego was about $600! And I earned $200 a week on average (often less). It would take months to pay those bills. I used to hate it. But, I had to have a car to get to work. So I just had to do it.

Cars are money pits.

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Dadto2

Most of my mates when i was a teen had old bangers with just 3rd party.

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IamOzgirl

Shop around for the insurance - when we moved our old insurance was not the cheapest option. 

Insurance depends on many things. 

Ie some make it cost prohibited just so they don't have the liability. 

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Soontobegran

Our children all only had 3rd party/fire/theft on their first cars. We bought them their first cars, they were all older but safe cars for the time. DH spent a lot of time ensuring this. They were responsible for insurance, registration, upkeep and fuel etc.

I'd be telling him to go to an auction house where you can get great buys of newish cars with a couple of dings. I would never get comprehensive insurance that equals the value of the car.

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Dadto2
Posted (edited)

I just did a quote with Allianz for an 18 year old with a 10 year old Toyota Corolla. Comprehensive insurance was $1800, 3rd party was $400.  Would it be cheaper to put the car in your name and have your as an additional driver?

Edited by Dadto2

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cward

My DD17 is on her L's, we have just added her to our policy as a listed driver.  It makes my insurance about $100-odd more but brings the excess down to $700 (from $2000) if she has an accident.

She just bought her grandmothers old car and we are doing the same thing.  Registering it in our name and listing her as a driver.  No way she could afford the insurance by herself (still at school with part time job)

 

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Rockwiz

Thanks everyone for all the helpful tips and info.

I always knew that males under the age of 25 pay a higher premium and females under 25 not much better. I guess I just never thought it would be that bad!  DS hopes to start Uni next year and so he won't have a full time job for at least 4 years. Also, as I said we only have the one car as I don't drive due to a visual impairment and DH will need the car. So I guess we have a few options. We do insure our car with Aami, so I can look into the drivers course though a 10% discount won't bring the premium down by much when you're starting at $2200 for comprehensive. DS has just completed 12 driving lessons through the ACT logbook system as well at great cost. So he has already done a lot of official training.

We may have to look at buying and registering the car in mine or DH's name and list DS as a driver and see what effect that has on the premium. Will also look at the fire and theft option only.

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Chchgirl

Yes it's expensive,  my 22 year old dd is on her green p's in nsw, had 3rd party but has just bought a more modern car and got rid of her old banger. 

It can't be on mine as I am stuck in Oz atm but normally live in Nz. She works full time and lives with her partner. 18 year old is doing driving lessons on her learners at the moment.

I never bought my kids cars as I've not been able to on my own, I did pay for driving lessons though.

 

 

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JuicyLife10

Also, shop around. Aami aren’t cheap. 

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purpleblaze

What about car sharing? I don’t know anything about it but I see some car next door or Flexi cars parked in the special bays.  Might be an option to tide him over?

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born.a.girl
Posted (edited)

That sounds about right, I'm afraid.

 

Yes, they did close the loophole of it being in your parents name a long while ago, and as a result there are far more options to choose from, especially over a range of insurance companies.

We use a broker (long story) who said that we could 1) put the car under our insurance and a) nominate her as a driver or 2) not nominate her as a driver, perfectly o.k.

If she was nominated as a driver, the insurance would be $X (same as if it was in her name)

If she was not nominated as a driver the insurance would be $x

If she had an accident and had been nominated, the excess would be $usual excess + $under 25

If she had an accident an hadn't been nominated, the excess would be the above PLUS non nominated P plate driver (that bit was about $900).

Gets confusing but basically save money on the insurance policy, or save money when and if they have an accident.

 

Our daughter has always had to pay for the running costs of her car, but we've funded the purchase and she pays us back as and when she can. We also paid for part of it, because although her budget was $7500, her Dad decided his precious snowflake had to have 3,000 airbags and my take on that was if he wants her to have that level of car then he should cough up.

 

As well as the insurance, I think it's important that they have the amount of the excess tucked away - if they are driving to a job then that has to be the first call on any money.  Have it in a savings account that's not part of their everyday spending.

 

Edited by born.a.girl

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Murderino
1 hour ago, JuicyLife10 said:

Also, shop around. Aami aren’t cheap. 

Interestingly every year when I get my car and house insurance renewals I get quotes from other companies and they always come out cheapest. Perhaps that’s because I’ve insured with them since I got my first car so have their diamond level?

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Rockwiz
3 minutes ago, Murderino said:

Interestingly every year when I get my car and house insurance renewals I get quotes from other companies and they always come out cheapest. Perhaps that’s because I’ve insured with them since I got my first car so have their diamond level?

Yep same here. For the last 2 years when we get the Aami renewal I do a quick comparison with others and Aami is still cheaper. It may be because DH is at the diamond level or whatever it is called these days.

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~LemonMyrtle~

I recently switched to Aami too, after alliance kept increasing my insurance every year, I switched and saved hundreds. 
switching is the only way to save these days. Or they just keep increasing your bill every year. Even though your car decreases in value! 

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Rockwiz
Posted (edited)
37 minutes ago, born.a.girl said:

That sounds about right, I'm afraid.

 

Yes, they did close the loophole of it being in your parents name a long while ago, and as a result there are far more options to choose from, especially over a range of insurance companies.

We use a broker (long story) who said that we could 1) put the car under our insurance and a) nominate her as a driver or 2) not nominate her as a driver, perfectly o.k.

If she was nominated as a driver, the insurance would be $X (same as if it was in her name)

If she was not nominated as a driver the insurance would be $x

If she had an accident and had been nominated, the excess would be $usual excess + $under 25

If she had an accident an hadn't been nominated, the excess would be the above PLUS non nominated P plate driver (that bit was about $900).

Gets confusing but basically save money on the insurance policy, or save money when and if they have an accident.

 

Our daughter has always had to pay for the running costs of her car, but we've funded the purchase and she pays us back as and when she can. We also paid for part of it, because although her budget was $7500, her Dad decided his precious snowflake had to have 3,000 airbags and my take on that was if he wants her to have that level of car then he should cough up.

 

As well as the insurance, I think it's important that they have the amount of the excess tucked away - if they are driving to a job then that has to be the first call on any money.  Have it in a savings account that's not part of their everyday spending.

 

 

 

That's very helpful B.a.G. Between DS's savings and the money I've put aside for him since he was a baby, he will have enough money to buy a second hand car. But it looks like we'll have to buy it so it's in our name and he can give us the money. With the insurance I guess it's either nominate him and then we have a huge premium each year till he gets older - which neither of us can afford. Or don't nominate him and pay a huge excess if we need to claim. Is that correct? 

Also, I assume he can't build up a no claim bonus until insurance is actually registered in his name?

Edited by Rockwiz
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born.a.girl
9 minutes ago, Rockwiz said:

That's very helpful B.a.G. Between DS's savings and the money I've put aside for him since he was a baby, he will have enough money to buy a second hand car. But it looks like we'll have to buy it so it's in our name and he can give us the money. With the insurance I guess it's either nominate him and then we have a huge premium each year till he gets older - which neither of us can afford. Or don't nominate him and pay a huge excess if we need to claim. Is that correct? 

Also, I assume he can't build up a no claim bonus until insurance is actually registered in his name?

Because we use a broker, I'm not sure of some of these facts - I can't even remember if we put it in her name, or nominated her on ours.

Yes, you don't win either way.  Nominate him pay higher insurance, don't nominate him have a third excess, which can then lead to an excess of  $2,500k.

Insurance is a funny thing - the brokers sometimes change us to others (and I know there are ones who don't give brokers commission) but the last one they moved us to, Blue Zebra (still owned by one of the big ones) were absolutely fantastic when my car got hammered with hail damaged AND the reasonable excess of $500 was reduced to $300 because I let them choose the repairer.

I don't know about the no claim bonus - that's the sort of think I leave to the broker to advise me on, but when our daughter wrote off her car, and her insurance for the new car was moved to Blue Zebra, they didn't change her rating because the accident was a minor one, it was just that the car was worth so little it wasn't repairable.  I've got a vague recollection we put the insurance in her name so she would build up a record, but driving in suburbia it's very hard for new p-platers not to have even a minor bingle.

Also, beware registering the car in your name. We made that mistake the first time, thinking it would indicate to her that she didn't own the car, but had the right to use it. After she paid it off, in order to get it transferred to her name, it needed a roadworthy, and this car worth a couple of thousand cost nearly that much again to get a RWC, inc new tyres (2 were o.k. but we figured might as well do the lot, and we only do good tyres for safety).  A week later she wrote it off.   Of course the money we;d spent was nowhere near reflected in the price offered, but I did double check and it was all fair enough. At least we hadn't paid the stamp duty ho ho.

So replacement car is in her name, we paid the difference, and she's paying us back, but she pays all outgoings, and the excess is set aside.

 

Good luck, exciting but nerve wracking times!

 

 

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