Driving habits will change with the introduction of Telematics when getting car insurance

As you may have heard the ‘little black box’ sat-nav tracker is set to become the new policy for car insurance in the near future. A year or two ago, it was being offered by Norwich Union (now Aviva) until they dropped it but now other insurance providers are set to implement trackers as standard going forward.

Young Marmalade has been implementing the little black box for some new and young drivers a few years now and this has been proved popular too. Many new drivers are willing to adopt this scheme as it can mean insurance premiums halved in the following year.

You may want to read the terms and conditions carefully as it could also be used against you; the tracking device is always on so even if you have parked the car, it will have a record of where that was. If you were to park somewhere that wasn’t safe such as places with no security cameras or unlawful parking such as on double yellow lines you will be held liable. The advantage on the other hand is that if the car were to be stolen, it would easily be tracked.

The costs

You will have to pay to have it installed as it’s not free; the most expensive insurer is imposing a £299 fee and some places also require a deposit of up to 40%. On top of this one off fee for installing it, there will then be a yearly or quarterly fee for keeping it active. You will be able to keep track of how you drive with a free app on your mobile or by accessing the statistics online. Some places can send you a weekly or monthly report on how well or badly you are driving. If you are a safe driver you will be rewarded with cheaper insurance.

Potential savings

Everyone wants to save money and as the rules for driving are continuously changing insurance is one of the biggest ways to bringing your finances under control. Although many places are estimating hundreds of pounds of savings remember that this will not apply to everyone. One insurer has been quoted as saying you can save up to £600 a year with Telematics car insurance but you will find that many experienced drivers have two cars insured costing £600, so I would imagine it would be hard for them to make any further savings.

In reality Telematics car insurance will only benefit young and new drivers; those who are experienced and have a clean driving licence will not really make any savings. If anything, they might make a loss. If you drive badly some insurers will penalise you by issuing fines for speeding or harsh braking, so all these factors must be taken into consideration before applying.

As a young driver myself, I do see how this can benefit us to getting lower insurance premiums but it’s a little too much of ‘big brother’ style for me to get into as the mere thought of being under constant surveillance sends shivers down my spine. I only take my car for a short distance to and from work and my local supermarket is only five minutes away so I doubt I will benefit from having Telematics car insurance but there are many who have opted for this due to one reason only, to encourage better driving. Many people have admitted that by being monitored, it has encouraged them to drive better therefore changing years of bad driving habits, for younger people cash back incentives have tempted them into joining. Whatever your reasons are for signing up think long and hard about this and do some research to see if you really can save money.