How young drivers can get cheaper car insurance
The price of car insurance has risen sharply, with average premiums up by 40% over the last year (to 1 March). Young drivers have been hit particularly hard, according to the AA, with average premiums up by 64% for those aged 17 to 22.
However, the recent launch of the telematic smartbox - which could knock around £300 off the price of an annual policy - aims to change this and make it fairer for young drivers, who are currently penalised by high premiums because they're perceived as higher risk.
What is a smartbox?
Fitted by an engineer, free of charge, the smartbox is placed under the bonnet or dashboard and records how the car is being driven. If you prove to be a safe driver over a set time period, the cost of your insurance will go down.
But if you're classed as a dangerous driver, you'll get a warning, then fines, and finally you could even lose your licence. If you're a repeat offender, you could see your insurance premium rise by around 15%.
How does it work?
Using a GPS tracking signal, the motion sensor in the car detects four different things: braking and acceleration; cornering; speed; and the time of day. There's a green, amber and red warning system indicating how well you're driving; the results are sent to the insurance company, the driver and the driver's parents.
The box stays in the car while the insurance policy is in force. At the end of the term, you have the option to either switch the box off or have it removed.
How do I get one?
As the technology is relatively new, only a few insurance companies offer it - mainly the Co-Operative and Young Marmalade, which both specialise in car insurance policies for young drivers and sell packages made up of a car fitted with a smartbox plus insurance.
Other companies, including the AA, are set to follow later this year.
Who can benefit?
This system is for young drivers and it's a way for them to show their insurance company how they are actually driving. Nigel Lacy, spokesperson for Young Marmalade, says the system allows young people to prove they are good drivers and therefore deserve lower premiums.
"The government says one in five young drivers crash in the first five months," he argues. "But, on the other hand, four out of five don't crash, and they don't deserve to be forced to pay over the odds because of the minority who do."
Is it just for young people?
Yes and no. This recent technology is aimed specifically at young people, but specialist providers, such as Insurethebox and Coverbox, use the smartbox for drivers of all ages to monitor the distance they travel and the way they drive.
However, it isn't initially the cheapest way to buy car insurance, as prices will only reduce year by year. So smartbox insurance is best suited to older people who are low-mileage drivers.
How much would you save?
Young drivers with a Co-Operative policy, for example, will have their driving assessed every 90 days and receive a 'safer driving discount' worth around 11% of the premium if they demonstrate sensible driving.
The Co-Operative says the 'pay-as-you-drive' system will be on average £328 cheaper than its competitors' prices, and around 82% of young drivers will save on their insurance.
The average young driver premium costs around £1,800 a year. A 17-year-old male driver based in Manchester would have to pay around £2,438 a year for insurance on a Daihatsu car. By using the Co-Operative Young Driver insurance, and with an 11.25% discount from a proven safe driving record, this would fall by £282.75.