Don't drive at night or the spy will report you.
Norwich Union, the UK's largest insurer, is cutting the cost of insurance for younger drivers. The price, however, is a spy in the boot that logs where you go and when, and reports back to the insurer. Some would argue that it's the thin end of a fairly thick wedge.
NU's take is that, based on actual car usage, the 'Pay As You Drive For Young Drivers' system is aimed at motorists aged 18-21. The company reckons it uses cutting-edge, in-car technology to calculate premiums based on when and how often they drive their car.
The 'black box' style device is fitted into the car and uses GPS technology to record car journeys. This information is then transmitted securely to Norwich Union via a mobile phone network.
According to NU, the black box device will be less than the size of a video cassette and will be fitted into your boot or passenger cabin. There will also be a small aerial for GPS and for a mobile telephone signal to send data to NU. The aerial will be placed inside the car (in most instances on the inside of your windscreen on the passenger side). The device will be wired to the car battery and ignition.
The premiums, which for drivers in this age bracket are traditionally very high, will be calculated in a similar way to mobile phone tariffs. Drivers will be able to control their premiums to more affordable levels by driving mainly during 'off peak' times between the hours of 6am and 11pm rather than driving during 'peak' times between 11pm and 6am.
These tariffs have been calculated based on accident statistics for the 18-21 age bracket, which show these motorists are at much greater risk of being killed or seriously injured in car accidents between the hours of 11pm and 6am.
By reflecting the time of day in the cost, NU said that the product makes insurance premiums more affordable and deters younger motorists from driving at night when the conditions are less safe.
Features of the scheme include:
A tariff per mile, with the rate personalised to each driver and dependent on the time of day the car is driven
The first 100 off peak miles each month are free
Young drivers could see a saving of up to 30 per cent a year off the cost of their premiums
Premiums are billed monthly - premiums will vary monthly if customers vary their driving
There is a one-off fee of £199 for the telematic device - this is expected to cost less than the savings to be made in premiums.
The box has a built in car locator - enabling customers to have their car located if there's been an accident, breakdown or if it has been stolen
In August, NU launched a nationwide pilot scheme of 'Pay As You Drive' insurance among 5,000 volunteers of all age ranges to investigate driving patterns and help set premium pricing.
NU said it can launch the product now because pricing can be calculated for these motorists as the time of day is such a major factor for this age group. The first 1,500 boxes are ready to be fitted.
The recently published independent Greenaway report into uninsured driving in the UK (link below) described Pay As You Drive as a 'potentially helpful innovation' by setting rates for late-night driving at a high enough level to encourage young drivers not to use their vehicle at this time.
Product manager Robert Ledger said, "The scheme brings motor insurance into the 21st century by providing affordable comprehensive insurance for young drivers in return for driving at safer times.
"There's no getting away from it, Government statistics show that this age group are more likely to be killed or injured in road accidents between the hours of 11pm and 6am - and this has been factored into tariffs for this product.
"Although the money-saving factor will probably be the main appeal for young drivers, I imagine the road safety aspect will appeal to their parents.
"Although this product may not suit all young drivers, we feel it does offer them an alternative to the standard motor insurance that is currently available. And by having their own insurance policy rather than being a named driver on their parents' policy, young drivers will be able to build up their own no claims discount, making insurance even cheaper in the future."
NU has an exclusive agreement with US insurer Progressive to pioneer Pay As You Drive insurance in the UK and Europe using telematics technology.
Young motorists or parents who want their children to sign up to be one of the 1,500 motorists on the 'Pay As You Drive'(tm) For Young Drivers test product can visit www.payasyoudriveinsurance.co.uk