By Mitch Lipka
April 2 Can a little device plugged into a port
under your car's dashboard help you drive better, save money and
diagnose your car's troubles? That's the premise behind some new
smartphone-linked gadgets, including one launched last week by
Verizon Wireless and Delphi Automotive LLP.
Think of them as high-tech translators that let you and your
car understand each other. The maker of one, Automatic Labs
Inc., in San Francisco claims its device can help cut your
gasoline spending by as much as a third.
The Delphi-made, Verizon-sold device, called Vehicle
Diagnostics, sends alerts to a user's smartphone when the car
suffers problems ranging from malfunctioning sensors to serious
transmission problems. It also allows a user to remotely start
the engine with a smartphone. At $249.99, though, with a
$5-a-month service fee, it isn't cheap, and it works only with
Verizon cell phones.
Some of this technology may already be standard fare on
certain high-end vehicles, but these gadgets work for just about
anyone with a car and a smartphone. Are they worth it? That's
another question. Drivers need to determine whether they drive
enough to justify the money spent, and they should consider the
privacy and security issues that some of these devices may
DRIVE WELL AND SAVE
The Automatic is a device-app combo designed to help drivers
save on gas, brake linings and more by monitoring driving
habits. The device is back-ordered, and the company is taking
orders, at $69.95 a pop, for July delivery.
"Changes in driving style can have a very big impact on fuel
efficiency - up to 30 to 35 percent," says Ljuba Miljkovic, the
company's chief product officer.
The device emits an audible signal when a driver is going
too fast, accelerating too rapidly or braking too hard - three
things that can affect gas mileage. Someone who regularly spends
$250 a month on gas (a typical average) and is willing to dial
back aggressive driving habits could save the cost of the app in
less than a month.
Automatic's Global Positioning System (GPS) feature will
collect maps of all the trips users make and analyze the fuel
costs. That could help you decide whether it's worth driving
five towns over to save $20 on a flat-screen television, for
Both the Delphi device and Automatic also can potentially
save consumers the cost of bringing their vehicles to a repair
shop for something benign. A check-engine light only alerts to a
problem without specificity, but both devices will communicate
in plain English everything from minor problems, such as a loose
gas cap, to major trouble, such as transmission failure, the
The idea of using technology to monitor driving isn't new;
insurers got there first. Progressive Corp first started
testing such devices in the late 1990s. They were large metal
boxes that had to be professionally installed and read.
As the technology has improved, other insurers have jumped
in. Allstate Insurance Co customers get a 10 percent discount
for signing up for its DriveWise device, which remains in the
user's car. Data gleaned from transmissions can lead to a
discount after six months and is re-evaluated every 12 months
While fewer than 1 percent of those driving today have used
such a device, usage should expand exponentially in the coming
years, says Tom Kavanaugh, insurance practice director for the
Some insurers leave their devices permanently installed in
customers' vehicles, but Progressive watches its customers for
six months with its Snapshot device and then has them ship it
back. Meshelle Smith, 53, a customer service worker in
Gainesville, Florida, says she tried Progressive's Snapshot
because using it came with no risk. She could qualify for a
discount if her driving over the six-month trial was considered
safe, but she did not risk an increase.
The result, Smith says, was the maximum 30 percent discount
- a $195 savings on her six-month premium. The discount remains
in place, though Smith's device was removed a couple of months
ago. About two-thirds of Snapshot users will get a discount of
10 percent to 15 percent, on average.
Those risk-free offers may disappear, though, says
Kavanaugh. "As mass adoption begins to occur, for everybody who
gets a 30 percent discount, someone's going to get a 30 percent
increase," he says. "By sharing your actual driving data, the
carrier might determine you have an increased risk profile."
We're still at least three years away from the devices
becoming commonplace enough for that to be a concern, he says.
Although Progressive's device is in 44 states, other insurers
have made fewer inroads and are growing slowly.
WHO IS WATCHING YOU DRIVE?
Both personal and insurance company-owned driving monitors
raise privacy concerns for some consumers.
"People liked the idea of getting the savings because they
are good drivers, but they don't like the idea of the insurance
company knowing where they are all the time," Pratt says. So
Progressive and some other insurers do not use a GPS function.
Delphi and Automatic do but say they will not use the data
they collect for any purpose other than to work with the
Many consumers would be willing to submit to a fair amount
of monitoring if it meant a discount. Almost two-thirds of
respondents to a recent survey by website CarInsurance.com said
they would allow an insurer to install a breathalyzer in their
cars, while 39 percent said they would accept a third party
monitoring their driving data and 20 percent said they would
allow an insurer to install an observation camera.