We look at the future of car insurance and what we need to do to keep our premiums down.
This article is now out of date. For the latest information, please read Pay As You Drive car insurance
Fit a small device in your car and you could get 30% off your car insurance premium. It's not as if the device is a semtex bomb or anything, so you'd expect people to jump at the chance, surely? And you'd be right.
Norwich Union's Pay As You Drive car insurance product for young people was over-subscribed. If you haven't heard of it yet, the insurer installs a black box no bigger than a DVD case in your car, so that it tracks you with GPS and records when, where and how often you drive. You pay a reduced monthly premium and then you pay for your usage.
The box records other information too, such as how fast you drive. According to moneysupermarket, the technology could even work out how fast you corner.
Norwich Union has now acquired two years of data from the first wave of subscribers, mostly aged 18 to 21. At present no one else can join, but I think it's likely the scheme will be rolled out to all drivers at some stage in the near future. Not only that, but other insurers are going to get in on the act.
This scheme is best for 'good' drivers. It's most competitive for anyone who's willing to do less mileage - perhaps less than 100 miles per day - and if you don't drive after 11pm. You may also be better off if you drive on safer roads.
One alternative to this is to simply get a low-mileage scheme. To find these policies, you just compare car insurance quotes online or walk into your broker and get a quote as normal. The mileage figure you provide will automatically be factored into the quote, so you should get a cheaper premium. You should always get quotes from lots of insurers, as a standard policy from one insurer will often beat specialist schemes like a low mileage one, or even Pay As You Drive.
However, I believe black-box policies are the way of the future. Insurers are constantly searching for more data to improve pricing, and looking for more ways to collate that data. You might not like the idea of big brother-type boxes, but, as more insurers get on board, good drivers may well have to take these schemes in order to get cheap policies. Anyone who doesn't co-operate may find that their premiums become less and less affordable.
Right, I'm off to buy 100 metres of tin foil. That'll keep those spying eyes off me!
Norwich Union's scheme is currently closed to new applicants, but you can still reduce your premiums by comparing car insurance quotes.