Teen car ownership and insurance

June 22, 2012 3:10 PM

My 19 yo son is ready to buy a car. From an insurance perspective (cost and/or risk) does it matter if the title is in his name or mine?

Details: state of IL, my driving record is excellent, he is newly licensed. He will be the main driver and will take the car with him to school in WI in the fall. I have my own car. We're splitting the cost of the car, and I am paying for the insurance. I want to spend as little as I can on insurance, obviously, but keep it legal and I don't know if there are any other risks.

posted by j810c to travel & transportation (8 answers total)

His name. If he is in a catastrophic accident (chulthu forbid), then your pockets are less likely to be scrutinized. At least that is what my insurance agent told me when I faced the same situation.
posted by Danf at 3:25 PM on June 22, 2012 [3 favorites]

If your son is involved in an accident, the ownership of the vehicle will determine who is sued/who is liable. The owner, not the driver, is liable for any damage done while the vehicle is being operated.
You may own a home or have other assets that could be at risk, whereas your 19 year old son likely does not.
So that's one reason for him to own the vehicle.
In terms of premium, if you own the vehicle you might be able to say that your son is an occasional operator of the new car. That might generate a reduced rate. It depends on how many vehicles/drivers there are in the household.
posted by elf27 at 3:28 PM on June 22, 2012

Yeah, it won't make any difference for your monthly insurance rates, but if he gets into a car crash situation where he gets sued for something, if your name is on the title then you are going to be part of who's being sued, whereas if it's not, they're not going to be able to file suit against the car owner's mother.
posted by brainmouse at 3:28 PM on June 22, 2012 [1 favorite]

>The owner, not the driver, is liable for any damage done while the vehicle is being operated.

Jeez, the legal misinformation found here is amazing sometimes.

This is not true. The true statement is that, in most states, the owner as well as the operator is responsible.

Thus, the usual operator should be the owner of the car.

Having him own the vehicle allows you and him to compare the cost of having him insured on your policy vs. having his own. Assuming that you have more assets, you probably have higher liability limits. Many drivers in their teens and twenties do not need high liability limits because their assets are typically, as Roger Daltrey put it, "sweet fuck all". So the cost of insurance is probably lower.
posted by megatherium at 6:07 PM on June 22, 2012 [1 favorite]

If you put the car in your name, you might consider getting an umbrella policy. They're pretty cheap and it will afford you protection after you cross limits of liability on your existing auto policy and will keep you from losing your house. (this is what my financial adviser recommends)
posted by plinth at 6:16 PM on June 22, 2012

When I had a car in my late teens and early twenties, the title was in my grandmother's name (it had belonged to my grandfather); supposedly this lowered the insurance premiums (she had her own car insured with the same company)..

However, I had no assets, and there was no chance that she would lose her house to a hypothetical lawsuit. In your case, the reduced premiums may not be worth the increased liability exposure.
posted by one more dead town's last parade at 7:39 PM on June 22, 2012

Talk to your insurance agent about this, especially if he will be taking it to another state. They should be able to tell you what the legal requirements are as well as the best ways to keep the bill down.
posted by soelo at 7:30 AM on June 23, 2012

Thanks everyone for answers. I called my insurance company and as it relates to rates, they said it doesn't matter who owns the car. (I avoided calling them because I wasn't sure they'd respond in my best interests.) So to avoid any risk to my assets, we'll put the title in his name. I was pleasantly surprised that because he took driver education and has a 'B' average in school, the additional cost is only $55 a year for liability only.
posted by j810c at 8:12 AM on June 23, 2012