Call0800 066 2888

Spread The Cost

Spread The Cost

Calculate My Loan
Monthly Payment £0
Total Repayable £0
(7.8% APR illustration)
Apply Now
This does not constitute a quote, it's for illustration purposes only. Rates may vary depending on loan amount and individual circumstances.

Insurance Premiums to Fall for Motorists

January 13, 2014

Do you know where your photographic ID driver’s licence is? Sure you do, but what about its paper counterpart?  Paper licences could become a thing of the past by 2015. At least that’s the plan proposed by ministers requiring driving records to be moved online, rendering the need to retain the paper counterpart mute. This comes as part of a big initiative to move many government and council services online.

Once this database is complete, insurance companies will have access to help gauge an individual’s risk factor and submit a quote accordingly.  Premiums are usually based on information given by the driver, with a percentage added to compensate for the less that truthful factors or genuine mistakes made on application forms. Hence requesting the paper license to validate the information given which, due to high costs involved in this practice, not every company does. Having the database online will allow companies to gain actual information about the applicant, possibly reducing the premiums by £15 a year.

 

The database, created by the Driver and Vehicle Licencing Agency (DVLA), will allow access to both insurance companies and public users requiring an individual’s licence number to access their information. When verifying details, the login will initially require your postcode and National Insurance Number – with the hope that, once set up officially, it will work in the bank’s way of verifying a person’s identity. This will limit the number of passwords you’ll need to remember.

This service is just one of many being digitised by mid-2015. Providing easier access to information will reform many services into more user-friendly platforms while, for those needing help with the internet, special helplines and IT specialists will be on hand. The paper part of your driving licence is due to be phased out by 2015 in favour of the online scheme, as well as paper tax disks. The car database which tells you which cars have been taxed and which are no longer on the road renders the physical tax disk unnecessary.

The DVLA has stated that, “although some services cannot be delivered digitally, such as assessing a customer’s fitness to drive, we can improve the processes supporting the delivery of these services through making greater use of digital tools”. Although work has not yet started on the new DVLA database, there are high hopes that it will be more cost-effective and user friendly, providing 24/7 access and real time updates.

Cabinet Office Minister Francis Maude says that “most of Britain’s drivers would see falls in premiums due to this new service. This will enable insurers, for example, to price much more accurately, because they will not have to take anything on trust”. By reducing this human error element, insurers can produce accurate quotes based on the individual’s information, rather than the percentage of people who fill in an application form incorrectly. The reduction in cost of man power required for receiving and returning paper licences and the trust in possibly incorrect information, poses potential benefits for the customer.

If you’re looking for a new car but don’t have the funds to finance it, the Car Loan Warehouse can help. While offering the best car financing service around, we also assign you your own personal finance advisor to guide you through the process. Check out our loan calculator to find a loan that suits you, no matter your budget.

About The Author

Jon Le Roux is co-founder and company director of The Car Loan Warehouse. Being a mad engineering and motorsport enthusiast, I spend more hours than is healthy, watching, reading or talking about cars, boats, motorbikes…..basically anything with an engine.