Online driving licence to reduce insurance costs

First the tax disc, now your driving licence, as government plans to put driving records online are set to make the paper counterpart licence obsolete – reducing your car insurance premium in the process.

By creating an online record that insurance companies can easily check, ministers and the Driver and Vehicle Licencing Agency (DVLA) expect insurance costs to fall, as insurers will be able to exactly analyse risk rather than hedging their bets.

On Bing: see pictures of the counterpart driving licence

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At present it’s tediously time consuming for car insurance companies to check motorists’ driving records with the DVLA, which means most take people at their word about the number of penalty points they have.

Unfortunately, even if drivers set out to be honest, there’s still a chance they may misremember the points on their licence or forget they’ve got them altogether. As a result insurance companies add an additional cost to all premiums in order to cover the forgetful as well as the wilfully negligent.

Moving driving records online will allow insurers to quickly check how many points a driver has as a matter of course, removing the need to ‘price in’ this risk factor. Which should mean that ‘honest’ motorists see a reduction in their annual premium of around £15.

The same process will also reduce DVLA and government costs by removing the need to send out and organise the current counterpart licence – the traditional paper element that we all have alongside our newer plastic photocards.

The new digital system would retain the photocard, but place all other records online, accessed via a .gov.uk website. Those without access to the internet will instead be directed to a special telephone assistance line.

The plan sees driving records become one of 25 public services that are due to go digital by the end of 2015; the other major change for motorists being the death of the tax disc, which we reported on at the end of last year.

The Association of British Insurers and the DVLA both indicate that car insurance premiums for almost all of the UK’s 40 million drivers should be reduced as a result.

But what do you think – will you miss the old paper driving licence or will you happily see it disappear in return for fairer car insurance pricing?

Image (c) REX

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By motoringresearch.com