Giving someone a lift could cost £2,500 fine and leave driver uninsured

It's the good deed that could invalidate your car insurance and attract a £2,500 fine.

Giving someone a lift can catch drivers out, leading to a string of penalties - including losing your vehicle and point on your licence.

Many drivers are unaware that charging someone for a ride - even if you're heading that way anyway - could come with the big fine and invalidated insurance.

Car Key on an Insurance Policy (SCU)

While dropping a friend or family member off is perfectly legal - any driver doing it to make a profit, faces a fixed-penalty notice and prosecution if caught.

The rules state that while it's acceptable to charge for fuel costs, anyone making money from it could be illegally operating as a taxi.

And anyone found guilty could face a fine, penalty points on their licence and even having their vehicle seized.

Those who charge passengers could also end up invalidating their insurance policies, as most providers won’t cover motorists who are secretly making a profit.

Five fibs which could invalidate your car insurance

"Drivers should always read the terms and conditions of their car insurance policy carefully to make sure they don’t accidentally invalidate it," Rachel Wait at MoneySuperMarket told the Mirror .

"What may be seen as fairly innocent, such as charging somebody for a lift, may actually encroach on the terms of their insurance. Taking the odd pound here or there to help cover petrol costs or general car maintenance is usually fine, but if you’re found to be making a profit from giving someone a lift your policy could be invalid.

"Always check with your insurer if you’re not sure. It’s also a good idea to check your cover will still be valid if you’re thinking of joining a lift sharing scheme."

The comparison website has listed the six ways drivers could be breaking the terms of their policy:

• Changing jobs without notifying their insurer
• Having an accident and not informing their insurer
• Letting others drive their car without the correct insurance
• Failing to update the address on their policy details
• Charging others for lifts
• Incorrectly listing their parent as the main policyholder