Black-box insurance technology seems to be helping younger motorists buck the overall rise in car-insurance premiums.
According to data released by Consumer Intelligence, average best-buy deals for all drivers rose by 4.6% in the year to August – but premiums for under-25s fell by 5.5% during the same period.
The Consumer Intelligence data, which is used by the Office of National Statistics to calculate official inflation statistics, shows that over-50s are paying the price, with their premiums rising by an average of 8.6%. Drivers aged between 25 and 49, meanwhile, have seen average best-buy premiums rise by 7.4% year-on-year.
Black-box technology – or so-called telematics – enables motorists to pay premiums based on their driving habits. A box attached to the car monitors when and how it is driven, with issues such as speed and braking taken into account. The better the car is driven, the lower the premiums.
Younger drivers traditionally pay more for their insurance, so it’s that age group that stands to benefit more from telematics, even though their overall premiums remain more expensive than any other age group.
The research shows that nearly half of the most competitive quotes for under-25s now come from insurers that offer telematics policies.
“Younger drivers are seeing the benefits of the innovation in the market, such as black-box policies, and that is reversing the massive increases seen at the turn of the decade,” says Ian Hughes, of Consumer Intelligence.
“Older drivers are to an extent helping to fund the premium reductions for younger motorists and need to ensure they are receiving the best value for money from their insurers.”