THE sales pitch will tell you that having ‘black box’ telematics in your car will cut insurance premiums.
This is certainly the case for new, young drivers but research by MoneySuperMarket has revealed that drivers over 30 who agree to have their driving habits monitored are actually charged more for their car insurance.
Due to advances in telematics technology, car insurance providers now offer voluntary schemes which monitor and set premiums based on driving habits. If you can prove that you drive safely and responsibly, your insurer could provide a lower premium.
Do telematics reduce your insurance costs?
Despite this, the research finds that telematics only reduces the cost of a premium for those aged 17-24.
The data looked at 1.2 million car insurance inquiries to reveal that drivers aged between 17 and 19 save an average of £855 on a standard average premium of £2,079. Drivers aged between 20 and 24 also save an average of £383.
Collectively, these two age groups make up two thirds (66%) of the telematics policies taken out.
How does telematics insurance work
The financial advantages of telematics diminish once a driver hits the age of 30. After this point, every age increment sees their premiums rise:
|Age||Average premiums without telematics||Average premiums with telematics||Percentage -/+|
Two models of cars account for over one in five of all telematics policies in the UK. Vauxhall Corsas represent 12% of telematics policies and Ford Fiesta’s make up 9%.
Rachel Wait, consumer affairs spokesperson at MoneySuperMarket, said: “Although telematics policies can generally benefit younger age groups, our research shows that it can have the opposite effect on older drivers.
“In some cases, premiums can rise by as much as £200, which is just under half the average cost of a premium in Q3 this yearII.
“If you’re under the age of 24, our research reveals that telematics could be a good option, with potential savings of up to £855.
“If you’re an older driver however, a telematics policy may not be the most cost-efficient way to take out a car insurance policy, which is why shopping around is so important – doing so can save you up to £250.”