Young drivers may find it easier to access the new generation of gadgets that could cut their insurance costs, analysis indicates.
Financial ratings company Defaqto said that car insurance providers are moving away from traditional hard-wired black boxes towards low-cost gadgets and apps that drivers can install in seconds.
App-based “stick-to-the-screen” or plug-in-socket devices cut out engineer call-outs and allow insurers to instantly start tracking drivers’ habits, it said.
Defaqto, which maintains a database of financial products, said several include an “online dashboard” allowing the policyholder to review their driving habits and styles, and providing suggestions for better driving.
Some telematics devices also include features such as automatic crash alerts or theft tracking, which “give parents priceless peace of mind”, Defaqto said.
Defaqto analysed its database on July 24 2025 to make its findings.
Mike Powell, motor insurance expert at Defaqto, said: “Snap-on sensors mean young drivers no longer have to hand over their keys for a black box fitting, and that convenience often means insurers are also receiving data quicker about their driving style.
“However, not all of the new devices include the facility for automatic crash alerts or theft tracking, so young drivers may want to check with the insurance provider to see if these are available.
“Technology is still the best way to bring down insurance costs for young drivers. Soaring premiums tempt some parents to insure a child’s car in their own name and list the real driver as an additional driver.
“Insurers call this ‘fronting’. It is classed as fraud and can void cover, land parents and teens with higher future premiums and even result in a criminal record. Building a young driver’s own no-claims discount is nearly always cheaper in the long run.”
Fraser Lyall, policy adviser for general insurance at the Association of British Insurers (ABI), said: “Telematics in any form can reward good driving and could be beneficial to all age groups. However, any evidence of dangerous habits could cost you more, so be sure to read the terms and conditions of telematics insurance to understand the impact of your driving behaviours.
“There are other options to explore when looking to manage the cost of cover, including taking advanced driving courses, adding security features to your vehicle and increasing your voluntary excess. It can also help to shop around, but make sure you choose a policy based on your needs, not just on price.”
Defaqto said windscreen-mounted sensors are now on around a third (35%) of telematics products, while “plug-and-drive” gadgets account for 29% of products.
The proportion of products with engineer-fitted black boxes has more than halved over the past five years, from 50% to 21%, Defaqto said, as insurers switch to “DIY” devices.
Most (83%) products still give drivers an online dashboard to track braking, speed and night-time trips.
But the proportion of telematics products with crash alert and theft tracking functions has fallen compared with five years ago, now accounting for 40% of policies, down from 57% and 52% respectively.
Market choice has also shrunk, Defaqto said. It counted 22 providers, down from 39 five years ago.
Here are some suggestions from Mr Powell for ways that young drivers can potentially reduce their costs and stay safe:
1. Cars with smaller engines, strong safety ratings and modest repair costs can mean lower premiums in the first place.
2. If your car has an alarm or immobiliser fitted, include this information when you get a quote as this could potentially reduce a premium.
3. Consider taking an advanced driving course. Some insurers may reward this with a discount.
4. Choose the right telematics insurance product – those that come with a gadget to track your driving style and reward safe driving behaviours.
5. Consider whether you can add (but do not fake) a parent driver. Listing mum or dad as an additional driver shows shared use and often cuts the price. But never claim that a parent is the main driver if this is not the case.
6. Consider a higher voluntary excess. but know what you could afford if you claim. The excess is an amount that the customer agrees they will pay towards an insurance claim.
7. Consider paying annually if possible. Instalment plans may carry interest charges.
8. Try shopping around and speaking directly to insurers. Extra questions could potentially unlock better deals.
