Motor insurance premiums could fall by £15 a year as a result of government plans to move all driving records online by mid-2015.
The new system would mean drivers no longer have to produce the “paper counterpart” when asked for their driving licence.
The Driver and Vehicle Licensing Agency (DVLA) will allow then allow insurers to access customers' information via the gov.uk website - as long as they have their driving licence number, national insurance number and address details.
Motoring experts claim it could also speed up the car hire process.
Insurers claim the move could save motorists around £15 a year on their insurance premiums, as it will allow them to check for traffic offences and points on licences at the point of sale.
At the moment, it is reasonably easy for drivers not to disclose points on their licence or to make a mistake – something that insurers claim pushes up premiums.
Cabinet Office minister Francis Maude said consumers would be able to check their own licence details, and the government will also offer assistance to anyone who has problems using the internet via local libraries, post offices and call centres.
Maude added that government IT projects such as this have already saved taxpayers over £1 billion a year.
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The DVLA told the BBC that "although some services cannot be delivered digitally, such as assessing a customer's fitness to drive, we can improve the processes supporting the delivery of these services through making greater use of digital tools".
In the government's Autumn Statement, it announced it would be scrapping tax discs after 93 years, saving the government £7 million in administration costs.