Car failed MOT. Too expensive to fix...

Knalchemist

Today my partners car failed it's MOT. It needs things doing that we simply can not afford right now.

Although this is a bad thing, we actually view this as a huge positive for us. We're selling the car for £400 to my brother, who will fix it and use it himself. The money will go on to my partners CC.

This means we will be left with one car.... which means ONE lot of expenses!

He will now be the main driver of my car, dropping my insurance from £56pm, down to £26pm!! We will pay half this each. So I'm saving about £43pm on insurance alone. He will be saving half the amount on insurance he used to spend.

Tax will cost us about £6.50pm each, whilst money for the annual service and MOT will cost us just £7.70pm each, as the MOT was done just last month. (We also put a little aside in to savings now incase of emergencies!)

My only issue is that I have to cancel my car insurance policy, in order to get the cheaper policy in my partners name. It will cost me a £60 cancellation fee to do this. I have no issue with doing this, I am just concerned about what it would look like on my credit report? Will creditors know i cancelled a policy and, if so, what effect would it have?

[Deleted User]

You cancelling the policy (as opposed to the insurance company cancelling it) won't look bad on you credit record.

People cancel policies all the time, for all sorts of reasons, not related to being a bad financial risk.

A couple of things to be aware of though, in relation to the policy going in your partners name.

Firstly, will your partner really be the main driver, as opposed to merely the policyholder and Registered Keeper?

To declare the wrong main driver, in order to get a lower premium, is Fronting which is Insurance Fraud.

It is a criminal offence, as well as very likely invalidating the policy.

Secondly, make sure you declare your true usage of the vehicle.

"Occasional user" doesn't mean a 2 or 3 days per week.

Also, if you will both be using the vehicle to travel to work, make sure you are both listed for commuting.

Knalchemist

My partners car is going, and we will both use mine. I am the registered keeper of the vehicle.

He works full time, and I part time. He will use the car for work (already is for commuting on the current policy), as he works 5 - 6 days per week. He will drop me off at my workplace before he goes to his workplace, as my shifts start 30 mins before his.

Is this fronting?

I will drive the car probably once a fortnight, if that, only when I visit my mum, which was the initial reason I purchased the car. However we just moved, so a train is actually quicker and easier from where I'm now living.

asparagus1968

that sounds a good plan!
no, you are not fronting with that arrangement (just asked my dad who is a insurance fraud investigator!)

Buzby

He is clearly is the main driver. As you say the insurance policy is his now, so it isn't 'fronting' as you are cancelling yours.

Do remember, you will need to set up a new policy in your own name within 2 years, otherwise your NCD will lapse.

Knalchemist

I wasn't aware of that Buzby, thanks for that information. We're planning on using just the one car for about a year, then re-evaluating our finances and seeing if we have a NEED for another car.

We are both studying part time for qualifications. Him in accounting, me in Law. So we're hoping that by the end of 2014 we'll both be in new employment earning more anyway!

[Deleted User]

No, that's not fronting, as he is the main user.

As to your fortnightly use of the car, are you sure you won't be using it more often?

How about when you go shopping, or on holiday, or on a day out?

If you will be sharing the driving, that also qualifies as you using it, even if your partner is in the car with you.

You will have a number of options to chose from, such as main, regular, occasional, etc.

If you are unsure of the amount of driving you will be doing, it's worth going up a step (eg. from occasional to regular), for the sake of a few pounds extra.

Like annual mileage, it's always better to declare too much, than too little.

It's also worth noting that nowadays, in order to prevent fronting, some companies are basing the premium on the highest risk driver (irrespective of whether or not they are the main driver), rather than the main driver/policyholder/RK.

Knalchemist

At the moment the only place I drive my car to is to work and back. I have had the car one year, and have done only 3000 miles. Once my boyfriends car goes, he will be driving me to work, so I won't be driving the car.

As for days out and weekends away etc, he always drives. I honestly think I would drive it less than fortnightly, however I thought I'd over estimate how much I'd use the car.

Getting_There_Slowly_2

Dropping a car will save you a fortune so you are right, if you can do it without making big sacrifices, it is a very positive thing! My wife and I did it about five years ago and we don't regret it at all.