Leeds Crown Court heard hospital worker Angela Ancill, 51, acted out of "misguided loyalty" to protect her 31-year-old daughter Rachel after she crashed into a lampost in Wakefield following an earlier accident in Leeds.
The court heard Asda worker Rachel Ancill was banned from driving for six months in May 2017 after totting up enough points for a disqualification and she was not a named driver on the insurance for the BMW.
Prosecutor, David Mackay said in October 2017 the mother and daughter gave a joint address of Rochester Court in Horbury, Wakefield, when applying for more than £15,000 of finance with Moneybarn to buy the 61 plate BMW One series.
on June 2 last year, Rachel Ancill - who works in human resources for Asda - was driving the BMW uninsured on Quebec Street in Leeds when she collided with the back of a van.
Both drivers stopped and the van driver took a photograph of the BMW, but Miss Ancill said she was in a rush and drove off before giving her details.
Mr Mackay said Angela Ancill, a grandmother who works as a ward orderly at Newton Lodge mental health hospital in Wakefield, later texted her daughter, saying: "You're not supposed to be driving the car. I can't do this anymore you're making me poorly."
Mr Mackay said Rachel Ancill paid a woman called Emily West £50 to say she had been the driver, but when police interviewed her it was clear she wasn't the driver.
Angela Ancill was prosecuted for failing to provide the driver' details and was fined £395 plus six penalty points after admitting the offence.
At around 7am on February 19, Rachel Ancill lost control of the BMW at a roundabout on Rochester Drive in Horbury and crashed into a lamppost.
Mr Mackay said Rachel walked to her mother's house nearby before Angela Ancill called police to report the car had been stolen after the keys were taken in a burglary.
Mother-of-one Rachel Ancill then rang insurer Direct Line pretending to be her mother and reported the car stolen.
Checks revealed there was still outstanding finance with Moneybarn and Direct Line agreed to pay £6,850 to Moneybarn, before police alerted Direct Line to their investigation.
Rachel Ancill then called Moneybarn - again pretending to be her mother - to report the car had been stolen and asked for a settlement figure of £11,432 for the original loan.
The court heard Rachel was planning to apply for a new driving licence under a false name of Rachel Parkinson and initially gave police that name when she was arrested on February 25.
Rachel Ancill, of Avondale Street, Wakefield, admitted two charges of perverting the course of justice, two counts of fraud and two charges of driving without insurance.
Angela Ancill, of The Shutt, Horbury, admitted one charge of perverting the course of justice.
In February 2011, Rachel Ancill was driving a Peugeot car and failed to stop after a crash with another car.
Angela Ancill has no previous convictions.
Catherine Duffy, mitigating for Angela Ancill, said: "She said she wanted to protect her daughter. It is out of misguided loyalty to her daughter that she is here today."
Shufqat Khan, mitigating for Rachel Ancill, said she committed the offences to drive to and from work and take her ten-year-old daughter to school.
Mr Khan said: "She knows only too well she has embroiled her mother in these proceedings."
Mr Khan said Rachel Ancill had endured a troubled childhood.
Judge Geoffrey Marson QC told both women: "I'm satisfied that this BMW was put in Mrs Angela Ancill's name and insured in her name in order to get cheaper insurance."
Handing Angela Ancill a nine-month jail sentence, suspended for two-years, Judge Marson told her: "I'm satisfied that you got involved in this out of a misplaced sense of loyalty to your daughter. You are otherwise a perfectly decent, hardworking woman."
Angela Ancill must also do 80 hours unpaid work, pay £500 prosecution costs and wear an electronic tag during a two-month 8pm to 5am curfew.
Handing Rachel Ancill an 18-month jail sentence, suspended for two-years, Judge Marson said: "You have no regard for the laws of the road and you have absolutely no regard for anyone else.
"You led your mother into this effectively because she was loyal to you. Your course of dishonesty has been persistent and consistent."
Rachel Ancill must pay £500 prosecution costs and wear an electronic tag during a four-month 7pm to 7am curfew.
Rachel Ancill was also banned from driving for two years.