Telematics, which is also known as black box technology, could help bring down car insurance premiums for young drivers, according to the RAC.
They are small devices placed inside a policyholder's car that measures driving variables such as speed, acceleration, braking as well as the time and location of journeys.
As a result, insurers can punish or reward drivers based on their driving. If someone's policy says they can't drive after 23:00 BST and the black box indicates they have, it could render their coverage null and void, for example.
On the flipside, drivers may get a partial refund if they drive particularly safely one month.
"It's certainly designed to help for the younger driver, because obviously they find it really hard to get a competitive quote as they have no proven no-claims discount," said RAC patrolperson Prakesh Patel.
Firms that have tested telematics already have said that the premiums among young drivers have nearly halved, indicating its effectiveness.