More than three-quarters of drivers under the age of 21 could get cheaper car insurance by taking out a telematics policy.
That's according to new research by Compare the Market, which found that 'black box' insurance policies can bring average savings of more than £1,000.
Here, we explain how telematics policies work and why some drivers remain reluctant to take one out.
Telematics (also known as black box insurance) involves having a tracker installed into your vehicle which monitors the quality of your driving.
A report by Compare the Market has found telematics quotes are cheaper than standard car insurance for 78% of drivers aged between 17 and 20 and 69% of those aged 21-24.
The price comparison site found the average telematics quote for a driver aged 17-20 was £1,811, a saving of £1,137 on the cheapest standard car insurance policy.
Telematics policies are generally aimed at young drivers, who face the highest insurance premiums. The table below shows the percentage of quotes where telematics policies were cheaper, based on the driver's age.
Compare the Market's research might make telematics policies seem an obvious choice, but a separate survey shows drivers are suspicious about so-called black box insurance.
A survey of 2,999 drivers found that 59% of 17-20 year olds said they were unlikely to take out a telematics policy, a figure that increased to 70% of drivers aged 21-24.
The most common reasons given were concerns over privacy and a reluctance to share driving information with an insurer.
Compare the Market also found that 58% of motorists aged under 21 didn't believe telematics policies would make their car insurance cheaper.
When you take out a telematics policy, a device will be installed in your car. Devices vary from GPS trackers that require professional installation to 'tags' you can stick on your windscreen.
Insurers use different metrics, but most monitor the quality of your driving in terms of speed, cornering, steering and braking, as well as the time of day you drive and your mileage.
Policies can reward good driving in a number of ways, including discounts on your next premium, cashback and bonuses such as retail vouchers.
Black box insurance also allows you to review your driving over time and can be useful if your car is stolen or you're involved in a dispute over a claim.
On the other hand, policies come with penalties if you consistently drive badly. Providers may increase your premium or cancel your cover altogether if you repeatedly break speed limits.
The video below explains the basics of black box insurance:
Black box insurance is primarily aimed at drivers aged under 25, who face significantly higher premiums than those with more experience.
These drivers may find that policies which charge 'per mile' work out cheaper than traditional policies with a flat-rate premium, but this isn't guaranteed.
Other drivers who might face higher premiums, such as elderly drivers or those with convictions, may also be able to get cheaper insurance with a black box policy.
Telematics policies have their benefits, but it's clear that some young drivers don't consider them to be the best option.
As a inexperienced driver, you'll probably find that paying a high insurance premium is unavoidable, but there are some steps you can take to reduce the cost.
Adding an older and more experienced driver (such as a parent) as a 'named driver' on your policy can reduce the cost of your premium.
A word of caution, though. It is illegal to put someone else down as the main driver if they're not, so ensure you're being truthful when filling out the forms.
Voluntary excesses can range from around £100-£500. A higher excess may lower your premium, but don't set it at a level you'd find unaffordable if you need to claim.
Any steps you can take to reduce your risk - or to not be seen as an exceptionally high-risk driver - could work in your favour.
Avoiding making modifications to your car that might catch the eye of an insurer, keeping your mileage relatively low and considering adding an immobiliser or extra security to your vehicle can all help.
The make and model of car you drive has a significant effect on the cost of your car insurance, with more powerful or high-performance vehicles likely to be more expensive to insure.
This means that as a young driver you're better off sticking to smaller vehicles with lower-horsepower engines.
If you haven't bought your car yet, it's worth running example insurance quotes on vehicles to get an idea of how much you'll need to pay.
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