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Young motorists can save £200 on insurance by using telematics

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Young drivers who face steep costs for motor cover could save an average of £201 – or 12.5 per cent - a year by choosing telematics technology over a standard policy, according to data.

Comparison website Moneysupermarket.com analysed almost 17million car insurance quotes and found telematics policies are cheaper than traditional policies.

At the same time, there has also been an increase in the number of telematics insurance deals being offered to younger drivers as its popularity grows.

Cheaper driving: Comprehensive research has found that telematics can help bring down insurance costs

It found that 29 per cent of motorists aged 17-19 were likely to be offered the choice to opt for a telematics policy, followed by 18 per cent of 20-24 year olds.

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Female motorists aged 17-19 were the most quoted group for telematics policies, making up almost a third of all quotes.

WHAT IS TELEMATICS?

Telematics works by drivers having a small 'black box' fitted to their vehicle.

This monitors a number of factors, including times driven, accelerating and breaking, and what types of road drivers use.

The driver is then able to monitor their progress online and can make any adjustments to their driving style accordingly.

Telematics policies serve to make motorists more aware of how they drive - this in turn can make premiums cheaper.

There may be restrictions however, such the times in the day that motorists are able to drive and a maximum annual mileage.

Peter Harrison, car insurance expert at Moneysupermarket, said: ‘Telematics technology, similar to those found on Formula One racing cars is now becoming mainstream within the insurance industry.

‘Although having your driving monitored may appear a little “big brother” for some drivers, the financial benefits of using this technology is a no brainer.

‘For drivers who are considered a higher insurance risk, installing a black box device in your car can save almost £200 on the price of a policy compared to standard car insurance products.’

Telematics helping young drivers be safer on the road

Annual premiums for younger drivers often reach four-figures. This is because inexperience means the risk of them being involved in an accident is higher than average.

Having a black box fitted to the car to monitor driving behaviour provides an insurer with a greater knowledge of the driver. It can also influence driving habits – motorists know that they have the box fitted and driving safely will result in premiums falling faster. 

 

Despite telematics being a relatively new product, there is already evidence that the introduction of this technology is helping to improve driver behaviour with less accidents, and therefore insurance claims as a result, Moneysupermarket says.

But there are some pitfalls to be weary of. Peter Harrison adds: ‘Motorists should be aware there are some restrictions with some black box policies such when and where you can drive your car, and some ban night time driving.

‘It is also important to be aware if the provider will charge you for the black box and installation should you choose to cancel the policy. Telematics is based on driving patterns and so is not a guaranteed way to see cost reduction.

‘Make sure you are aware of your options and find the policy best suited to your needs by using a comparison tool as you may still find a better deal with a more traditional policy.’

Young females witness record price rises – but males benefit

Young women have been hit by the largest increases to car insurance premiums ever recorded for an age group over the past year, as EU rules on gender discrimination removed the discount they have traditionally enjoyed over their male counterparts.

The average quoted comprehensive premium for a 17-20 year old woman rose by an eye-watering 20.7 per cent in the last 12 months, according to research in the Confused.com/Towers Watson car insurance price index. This is the biggest year-on-year jump ever recorded for any age group.

Yearly car insurance costs for young females are now at an all-time high average of £2,256. But at the same time, young male motorists have seen prices plummet. The average quoted price for a 17-20 man fell by an average 21.6 per cent over the past year.

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