Teen driver monitoring devices, which typically cost $150 to $250 and sometimes require a monthly subscription fee, are GPS devices that are installed in a vehicle and transmit data whenever the car is running. Many plug in to the car's on-board diagnostic computer and are easy to install. Others are hard-wired in the car for about $50 by a car audio or car alarm installation company.
Teen driver devices typically monitor the speed and location of the car. In some cases, the data is stored in the device, which then is connected to a computer to be viewed. The higher-end systems, which require a $19 to $40 monthly subscription, transmit the data in real time. With these systems, parents use a web-based interface to set up parameters for the device such as when the speed limit has been exceeded by a certain amount or when the car leaves a certain geographic boundary and whether they want to receive notifications. Depending on the system, alerts can be accessed online or sent via email or text message to the parent. Numerous studies show teens are more careful drivers when they know their driving habits are being monitored.
Insurance discounts, ranging from 5 percent to 33 percent, are offered by many carriers for monitoring devices that are permanently installed in the car. In some cases, carriers give the discount because the system is considered an anti-theft tracking device, while other carriers provide the discount because the systems encourage better driving habits by teen drivers.
Insurance carriers do not offer discounts for portable devices, such as GPS units that do not have to be physically connected to the car or cellphone apps that monitor driving, as these types of devices can be turned off or easily removed from the car.