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Pay how you drive

  • Teenagers can cut premiums by 100s
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A relatively new and even more limited offer that looks like it has the potential to make the biggest difference to young drivers premiums is a policy priced according to how you drive. Several insurers are now using technology to monitor the acceleration, braking and cornering of a car. This is then used to rate the drivers overall performance and reward good drivers with lower premiums. The Association of British Insurers supports the idea.

The Co-operative is one such company running this scheme, and director of general insurance David Neave says: So far nearly 90% of customers are on track to make savings by driving consistently well.

The Co-op claims that around 10,000 people are using its telematics-based policy, and they stand to save up to 11% per year if they demonstrate safe and controlled driving. The policy is recalculated every 90 days, so good driving should bring costs down.

Insurance expert Thatcham reports that the use of black boxes doesnt just have a positive effect on insurance, but can also help teach young motorists to be better drivers. Matthew Avery, head of research, cites the results of tests in Switzerland where Axa has been fitting black boxes purely as crash recorders. The tests have shown a 15% reduction in crashes among young drivers.

It has encouraged some drivers to drive more carefully, says Mr Avery. Some drivers will respond to the fact that they are being watched. However, those opting for this are the motivated ones is the 18-year-old tearaway going to want one? Im not so sure.

How car makers are helping young drivers

Mini Until the end of June 2012, you can buy a new Cooper or Cooper D and get a years free insurance if you are over 21, or a contribution towards your premium if youre younger.

Contributions are paid only if you take out a Mini insurance policy, though.

Citron If youre over 21 and hold at least one years no-claims bonus, then Citron will add another years no-claims bonus to your policy.
Volkswagen Polo customers over the age of 21 can get one years free comprehensive insurance from

Volkswagen Insurance on all three- and five-door Polos (excluding the GTI and Bluemotion).