News: Motorists who hit the ground lying

One in 10 make dishonest insurance applications; first-time buyers fail to talk down asking prices; property scams wound up
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The Independent Online

One in 10 drivers lie when making car insurance applications, in a bid to keep down the cost.

One in 10 drivers lie when making car insurance applications, in a bid to keep down the cost.

The most common tale told by motorists is that they keep their car in a garage at night, when it is really left on the road.

This is according to new findings from the RAC which show drivers are also economical with the truth when estimating the value of a car, its power and performance. Some even lied about their main address in the hope of securing a lower premium.

"When you look at the bills some people face, it's easy to understand why they feel pushed to reduce their car costs," says RAC spokesman Philip Hale.

This view is backed by the latest figures from price-comparison service insuresupermarket.com, which show that the cost of car cover has gone up by nearly a third in the past year - from £490 to £639. Premiums soared by 25 per cent in the last six months of 2004 alone.

But Mr Hale warns drivers that they are putting themselves at risk by lying on their insurance applications. "This is a false economy. Many policies will be invalid if the details given don't match the vehicle."

Further findings from the RAC show a quarter of motorists have only taken out minimal levels of cover to keep premiums down, while 9 per cent owned up to having driven without insurance at some point.

Get haggling

First-time homebuyers are failing to haggle for a lower sale price, new research shows. According to broker Bradford & Bingley, nearly a third have paid the full asking price without trying to negotiate a reduction. Nine in 10 first-timers, meanwhile, can't get the home they want.

Bradford & Bingley also found in the survey that 50 per cent of first-time buyers thought it would take them three years to get on the property ladder. Just under a third expected to wait for more than five years.

The research showed many first-timers are struggling because they are still paying off other debts (44 per cent) or have little or no savings (31 per cent) - making it difficult to build up a deposit while paying rent.

But Bradford & Bingley spokesman Duncan Pownall urges first-time buyers to make the most of not being in a long chain. "Many don't realise they are in a strong bargaining position, especially with the softening in the housing market, and are failing to negotiate on price." He adds that they could end up paying thousands of pounds more than they need to.

Buy-to-lets busted

The Government last week clamped down on a buy-to-let property scam which promised to help investors get rich quick - shutting down the firms involved.

The companies, which included Sterling Mansion (UK) Ltd and Mansion Investments Ltd, took substantial sums of money from members of the public - promising to help each of them build a portfolio of properties worth £1m inside a year.

The closures follow an investigation by the Deparment of Trade Industry into property investment clubs.

The companies lured investors - often inexperienced in the buy-to-let market - with glossy brochures and slick sales pitches. But none of the investors achieved a £1m portfolio, and many lost tens of thousands of pounds in the process.

"These companies knew that their clients, who had all invested substantial sums of money, couldn't make anything like the returns promised," says DTI minister Gerry Sutcliffe. "The schemes were completely misleading and set up with the sole aim of parting people from their money."

The companies were wound up last Wednesday.

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