Easy in but not so easy out

Posted by Jessica Searle in Personal Finance on 11 April 2013 - Jessica worked as a Credit Analyst at checkmyfile until 2013

The little black box….. the novel idea designed to decrease your insurance premiums. Originally fitted for free, many are now finding a fee of up to £90 is being charged for its removal.

Currently being favoured by younger and female drivers who have been affected by the changes in European legislation governing premiums, resulting in a hike up of prices, in the name of equality. The idea behind the little computer affixed beneath your dashboard is to reward you for driving safely.

By the use of telematics technology, which track your driving habits, the computer – which is only the size of a smartphone - records if you speed, brake suddenly or regularly drive at night – all of which result in an increase in your car insurance premium.

It is free to have the technology installed into your car, as this is built into the cost of your premiums, but it has emerged that some insurers will charge a rather costly fee to have the little box removed at a later date. Amongst others, the AA and the Co-operative Bank will be charging drivers £90 to disconnect the box. InsuretheBox is taking a slightly lighter approach with a charge of up to £50, but Direct Line is removing it for free.

As an alternative, policyholders can ask their insurer simply to turn off the box, but still leave it in their car. This should work fine as the size itself is not intrusive, but if you then switch insurer, you will need to have the old black box removed, as each individual telematics provider uses slightly differently technology.

It is important to consider all of the pros and cons of installing a black box, carefully checking the terms and conditions of your provider to really see how this will affect you in the long term.

So it seems,that in the case of the little black box... one size does not fit all.

Jessica Searle is a Credit Analyst at checkmyfile and has a degree in English Literature from the University of Exeter. You can contact her at jessica.searle@checkmyfile.com

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