Black Box Car Insurance: Can it save you money?

With over 50% of UK adults revealing their car insurance has increased by up to £100 in the previous year, black box insurance can be an effective way to cut pounds off your premiums.

A black box is a small GPS tracking device installed in your car, which monitors both how you drive and how often you drive. The result? Your insurer can offer a more accurate – and typically, cheaper – price.

But are the savings worth the hassle, are there any downsides and what would happen if you were to get caught speeding? Liz Hunter, our Commercial Director here at  Money Expert, shares everything you need to know to make sure black box insurance is the right choice for you.

How does black box insurance work?

When you get black box insurance, your insurer will arrange for a technician to install a small device in your car. You won’t see it, and it won’t affect your driving or your vehicle’s performance.

This device (aka, the black box) tracks all aspects of your driving, from speed and acceleration to braking and cornering.

Your insurer will use this data to create a ‘driver score’, which demonstrates how safe of a driver you are. The higher your driver score, the safer a driver they believe you are.

If you score highly, your renewal price – when it comes to it – will be lower. In most cases, your insurance premium won’t change instantly.

On the flip side, if you score low, your premium is likely to increase. However, insurers don’t share your data with other providers, so this shouldn’t negatively affect quotes if you choose to switch.

Who is black box insurance best suited to?

Black box insurance allows you to pay for insurance based on your actual driving behaviour, rather than your age or location.

This makes it particularly beneficial if you’re a young or inexperienced driver, whom insurers consider to be more at risk of an accident. By proving to them that you’re a safe driver, your premium could drastically reduce.

The same goes for motorists with previous driving offences. If you can demonstrate driving improvement over a long period, you may see a reduction in your premium.

However, it’s available to anyone, of any age. As long as you’re a safe and responsible driver, it can be an impactful way to save.

How much could I save by having a black box fitted to my vehicle?

According to the British Insurance Brokers' Association, young drivers typically save around 30% by opting for black box insurance.

Many providers advertise potential savings of up to 60% on their website, but this is likely to be the best-case scenario, for those with the highest driving scores.

What happens if I speed or do something wrong?

While black box insurance aims to reward safe driving rather than penalise minor lapses, consistent risky driving could have consequences on both your premium and coverage.

Regular harsh braking and acceleration – especially if this involves exceeding the speed limit – will bring your driver score down, meaning your premiums could go up significantly when it comes to renewal.

Worst-case scenario? If your driving is considered dangerous, your insurer could cancel your policy altogether. This could also make it difficult to gain coverage from another provider.

However, most UK insurers claim that they won’t inform the police if you committed a speeding offence unless a policy inquiry is made or a serious incident occurs.

How does having a black box impact my mileage?

When you take out any car insurance policy, you’re asked to estimate your annual mileage. Generally, lower mileage means lower premiums.

The problem? You’re not supposed to exceed your mileage estimate – and with black box policies, insurers have more immediate access to your mileage. In fact, miles driven is a key factor in your driving score and premiums.

If you do exceed your mileage, don’t worry. You won’t be immediately penalised or have your policy cancelled. However, it’s certainly something to be aware of, as it’s almost guaranteed to increase your premiums.

On the bright side, if your black box reveals you’re driving less than you estimated at the start of your policy, your insurer may discount your premiums.

Does black box insurance come with a curfew?

You’ll be pleased to hear that very few black box insurers in the UK will set an official curfew or restrict you from driving at night.

Still, insurers do recognise that nighttime driving is riskier due to lower visibility and driver fatigue. If you do drive regularly at night, your driver score could be negatively affected, meaning the savings you earn with a black box policy could be limited.

If you’re unsure, it’s worth calling your chosen provider, letting them know how often you drive at night and asking whether a black box could realistically save you any money.

I’m concerned about privacy – can my insurer track my location?

While your insurer can indeed track the location of your car using GPS, this isn’t to monitor where you go – but rather, to track speed, braking and cornering, which is used to calculate your driving score.

Plus, there's no real-time location tracking. The black box simply collects data on your journeys for later analysis. This means your insurer can't pinpoint your exact location at any given moment.

Reputable insurers comply with strict data protection regulations, ensuring your information is encrypted and stored securely. By law, they cannot share your data with third parties without your consent, except in specific situations like legal or fraud investigations.

The plus side? If your car is stolen, your insurer will be able to help you track it.

Will my insurer know if I unplug my black box?

It’s a condition of a black box insurance policy that the black box remains plugged in at all times.

The moment you unplug, remove or even deactivate your black box, your insurers will be notified. You’re likely to receive a call from your insurer, who’ll ask you to reconnect your black box.

If you fail to do so, they may revoke any discount on your premiums that you have earned through the black box. Worse, they could cancel your policy altogether, which can make it harder to secure cover in the future.

So, is black box insurance right for me?

Black box insurance can be a great way for safe drivers to save money on their car insurance, whilst encouraging safer roads for everyone.

Ultimately, the questions to ask yourself are:

• Do I consider myself a safe and confident driver?
• Am I comfortable with my data being collected?
• Do I rarely drive at night? (Nighttime driving might affect your score with some providers, so it’s worth checking with individual insurers.)

If yes, it’s worth looking into black box insurance and potentially unlocking significant savings on your car insurance policy.