You’ve probably heard of black box car insurance, even if you’re not completely sure what it entails. There must be a black box involved somewhere though, right? There is indeed a small black box installed in your car with this type of insurance, which is also known as telematics.
The idea behind black box insurance is that it offers drivers with less experience the opportunity to show that they are responsible on the road. And in return, they will be offered lower rates on their insurance.
What is Black Box Car Insurance?
Black box insurance is essentially a way for insurance companies to monitor your driving habits, to ensure that you’re driving as safely as possible. A black box will be installed in your vehicle, which will use GPS to work out what sort of driver you are. You’ll be given a score, which you can check online, and your insurance premiums will then be based on this individual assessment, rather than a simple flat rate.
Black box insurance tends to be most commonly used by younger or less experienced drivers. This is because such individuals have not yet been able to prove that they are competent drivers, as they haven’t been on the road long. The black box demonstrates that they can drive responsibly, taking few risks. Insurance providers will then reward these drivers with lower premiums and overall insurance costs.
Advantages of Black Box Car Insurance
There are a number of advantages to getting telematic insurance, the most obvious being the cost. We’ve outlined the top three benefits to black box insurance below:
1. Cheaper Insurance
As mentioned above, having a black box in your car should help you save money on your insurance, especially if you’ve recently passed your test. Insurance tends to be more expensive for young drivers, but it can be reduced if you’re willing to prove that you have good driving habits.
2. Better For People With a Poor Driving History
If you’ve previously committed any driving offences, or been involved in an accident, your insurance is bound to go up. With a black box though, you could be offered lower premiums. And as you’ll be aware that your driving is being monitored, you’re likely to be more conscious of how you’re behaving on the road, making you a more cautious driver.
3. Deters Theft
Because a black box uses GPS, the vehicle can easily be tracked down. This can work to deter theft – knowing that the car location is tracked, a burglar may think twice before stealing the vehicle. And if your car were stolen, it would be easy to recover.
Limitations of Black Box Car Insurance
While many people agree that black box insurance can save you money, it does come with a few downsides. To help you weigh up the pros and cons, we’ve listed the main three limitations to this type of insurance below:
1. Journey Restrictions
While not all black box insurance companies put these restrictions in place, some will put limits on the length of your journey, or how many trips you make in a day. This is because people are more likely to have accidents if they have been on the road for extended periods of time. Fatigue could set in, causing the driver to be less vigilant. If you do a lot of driving, journey restrictions could be a major problem for you.
2. No Late Night Driving
As with journey length, the time you drive could also be restricted. Some insurance companies who offer black box insurance set curfews on your driving. Accidents often happen at night, so with a black box, you may be penalised for driving in the dark, after a set time. And if you were to break this rule, you could end up with higher premiums.
3. Extra Fees
While you should hopefully save money overall with black box insurance, there’s a good chance that there will be upfront fees. You will probably have to pay for a licensed installer to place the black box in your car at the start of your policy. And if you decide to get the box removed, there may be a fee for this too. Any damage to the device while it’s in your possession might also need to be covered by you.
Making Driving More Affordable
Perhaps the main benefit of black box insurance is that it can make insuring your car much more economical, particularly for new drivers and anyone who has previously been involved in an accident. It’s a way for the insurance company to make sure that the motorist is driving as safely as possible. That way, the company is less likely to have to pay out any accident or repair costs.
Here at Vehicle Finance Today, we understand that making driving more affordable is the top priority for a lot of people. That’s why, when you make a vehicle finance application with us, we aim to find you the most suitable lender. Use our car finance calculator today to get a rough idea of how much you could borrow!
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