Should you give up privacy for cheaper car…

Michael Aminov-Tobin almost forgot a car insurance company was tracking his driving. He wasn't paying extra attention to how fast he drove or how hard he hit his brakes. So he was astonished when the company offered to insure his 2016 Hyundai Veloster Turbo for $100 a month less than he'd been paying.

"When it popped up with the price that it did, I was like, 'Holy crap, that's awesome!'" says Aminov-Tobin, 25, who operates a video production firm from his home near Columbus, Ohio.

He benefited from a growing trend known as usage-based insurance, or UBI, in which auto insurance companies electronically monitor a customer's driving and offer discounts in exchange.

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Such programs can be a great deal for careful drivers and low-mileage users, but they also present significant privacy concerns, experts say. Before agreeing to be monitored, drivers should understand the risks and ask the right questions.

"The data is so rich," says Ting Zhu, an associate professor for Purdue University's Krannert School of Management who studies UBI. "They know exactly where you go and when you go."

Keys sit on a car insurance policy. (Photo: The Motley Fool)

The draw for drivers

Letting people prove they're safe drivers makes auto insurance pricing more fair, advocates say.

Traditional car insurance rates are based on your driving record, plus demographic factors like age, location and marital status. While usage-based policies still consider these factors, they base part of the rate on your driving behavior using telematics technology. Data are typically gathered via a plug-in device for your car's diagnostic port or a smartphone app.

"Good drivers should pay less," says Robert Hunter, director of insurance for the Consumer Federation of America. "How you drive, and not who you are, should determine your rate."

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Discounts can be significant for good drivers. With Nationwide's SmartRide, discounts can reach 40 percent, says David Arango, senior vice president of personal lines, which include auto and home. At Root Insurance, the startup that insures Aminov-Tobin, the best drivers can cut their rates nearly in half, says CEO Alex Timm. At both companies, the executives say, typical savings are around 20 percent.

Low-mileage drivers can benefit, too. Evan Makovsky, 42, of Hoboken, New Jersey, estimates he saved $1,000 a year by switching to Metromile, which charges a monthly base rate plus a per-mile rate. Makovsky drives his 2009 Volkswagen Passat mostly on weekends.

But rates aren't always better with usage-based insurance. For instance, if you change jobs and have a longer commute, a pay-per-mile policy could become costly. And with Progressive's Snapshot program, which monitors how you drive, rates go up for about 20 percent of drivers, according to the insurer. Bad drivers won't pay extra at Nationwide, Arango says, but they can lose their initial discount.

FacebookTwitterGoogle+LinkedIn25 most expensive car models to insure FullscreenPost to FacebookPosted!

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To determine the 25 Cars with the highest insurance costs, 24/7 Wall St. reviewed data on insurance claim payments made by insurers by make and model, provided by the Insurance Institute for Highway Safety, a nonprofit research organization funded by auto insurers. The costs include six types of insurance: collision, property damage, comprehensive, personal injury, medical payment, and bodily injury. The model that is most expensive to insure had the highest overall average cost to the insurer per year. These data are for 575 vehicles of 2014-2016 model years sold in the United States. No. 25 is the Kia Forte: Annual average insurance paid: $1,155.82; Annual collision insurance paid: $425.10; Type: Small four-door; Retail price:$16,800. Bruce Benedict, KIAFullscreen24. Mercedes-Benz C class four-door 2WD: 
Annual average insurance paid: $1,157.34; 
Annual collision insurance paid: $608.40; 
Type: Midsize luxury; 
Retail price:$40,250. Mercedes-BenzFullscreen23. Nissan Versa: 
Annual average insurance paid:$1,157.59; Annual collision insurance paid:$444.60
; Type:Small four-door;
 Retail price:$12,110. NissanFullscreen22. Nissan Sentra:
 Annual average insurance paid:$1,165.05;
 Annual collision insurance paid:$471.90;
 Type: Small four-door;
 Retail price:$16,990. NissanFullscreen21. Lexus IS 350 four-door 2WD:
 Annual average insurance paid:$1,167.11
; Annual collision insurance paid:$627.90;
 Type:Midsize luxury
; Retail price:$38,210. ToyotaFullscreen20. Audi A4 four-door 2WD:
 Annual average insurance paid:$1,169.13;
 Annual collision insurance paid:$666.90;
 Type:Midsize luxury
; Retail price:$36,000. AUDI AGFullscreen19. Land Rover Range Rover Sport four-door 4WD:
 Annual average insurance paid: $1,173.05;
 Annual collision insurance paid: $631.80
; Type: Midsize luxury; SUV
 Retail price:$66,750. Land RoverFullscreen18. Infiniti Q50 four-door 4WD:
 Annual average insurance paid:$1,182.32;
 Annual collision insurance paid:$612.30;
 Type:Midsize luxury;
 Retail price:$66,750. InfinitiFullscreen17. Dodge Dart
: Annual average insurance paid:$1,187.55
; Annual collision insurance paid:$468.00;
 Type:Small four-door
; Retail price:$16,995. FCAFullscreen16. Kia Rio: Annual average insurance paid:$1,191.26;
 Annual collision insurance paid:$413.40;
 Type:Mini four-door;
 Retail price:$13,900. KiaFullscreen15. Nissan Maxima: Annual average insurance paid:$1,237.68
; Annual collision insurance paid:$596.70;
 Type:Midsize four-door;
 Retail price:$33,270. NissanFullscreen14. Scion tC:
 Annual average insurance paid:$1,237.74;
 Annual collision insurance paid:$518.70;
 Type:Small two-door;
 Retail price:$19,385. Robert Deutsch, USA TODAYFullscreen13. Chrysler 200 2WD
: Annual average insurance paid:$1,261.87
; Annual collision insurance paid:$471.90;
 Type:Midsize four-door;
 Retail price:$22,115. ChryslerFullscreen12. Scion iA: Annual average insurance paid:$1,274.51;
 Annual collision insurance paid:$530.40;
 Type:Mini four-door;
 Retail price:$15,700. David Dewhurst PhotographyFullscreen11. Ford Mustang two-door
: Annual average insurance paid:$1,291.53;
 Annual collision insurance paid:$686.40
; Type:Midsize sports cars;
 Retail price:$25,680. FordFullscreen10. Lexus GS 350 four-door 2WD
: Annual average insurance paid:$1,295.44;
 Annual collision insurance paid:$705.90;
 Type:Large luxury
; Retail price:$46,310. LexusFullscreen9. BMW 4 series two-door 2WD:
 Annual average insurance paid:$1,306.51;
 Annual collision insurance paid:$659.10;
 Type:Midsize luxury;
 Retail price:$43,300. TONY DING, APFullscreen8. Audi A7 four-door 4WD:
 Annual average insurance paid:$1,322.51; Annual collision insurance paid:$830.70;
 Type:Large luxury
; Retail price:$69,700. AUDI AGFullscreen7. Dodge Challenger
: Annual average insurance paid:$1,335.79; Annual collision insurance paid:$627.90;
 Type:Large two-door
; Retail price:$27,295. ChryslerFullscreen6. Kia Optima hybrid:
 Annual average insurance paid:$1,355.13
; Annual collision insurance paid:$592.80;
 Type:Midsize four-door
; Retail price:$25,995. KIAFullscreen5. Dodge Charger 2WD
: Annual average insurance paid:$1,385.61;
 Annual collision insurance paid:$569.40;
 Type:Large four-door;
 Retail price:$28,995. ChryslerFullscreen4. Scion FR-S
: Annual average insurance paid:$1,403.67
; Annual collision insurance paid:$752.70;
 Type:Small two-door
; Retail price:$25,305. ScionFullscreen3. Mitsubishi Lancer 2WD:
 Annual average insurance paid:$1,458.48;
 Annual collision insurance paid:$561.60
; Type:Small four-door
; Retail price:$17,79. MitsubishiFullscreen2. Mercedes-Benz S class four-door LWB 2WD:
 Annual average insurance paid:$1,540.63;
 Annual collision insurance paid:$803.40;
 Type:Large luxury
; Retail price:$89,900. Mercedes-BenzFullscreen1. Tesla Model S four-door electric 4WD: Annual average insurance paid: $1,789.48
; Annual collision insurance paid: $1310.40; Type: Large luxury
; Retail price: $74,500.   TeslaFullscreenInterested in this topic? You may also want to view these photo galleries:Replay1 of 252 of 253 of 254 of 255 of 256 of 257 of 258 of 259 of 2510 of 2511 of 2512 of 2513 of 2514 of 2515 of 2516 of 2517 of 2518 of 2519 of 2520 of 2521 of 2522 of 2523 of 2524 of 2525 of 25AutoplayShow ThumbnailsShow CaptionsLast SlideNext SlideData privacy concerns

Whether the price break is worth the privacy you relinquish by having your driving monitored depends on how you view the risks.

Aminov-Tobin wasn't concerned: "If you want the best rates, I guess you have to sacrifice a little," he says.

But privacy expert Jen King fears drivers may sacrifice more than they realize.

"Where you go every day can tell people a lot about what you're interested in, where you live, who you're associating with," says King, director of consumer privacy for the Center for Internet and Society at Stanford Law School.

Even if the information isn't sold, she says, it might be used in ways the driver didn't anticipate.

A data breach is another danger, says Purdue's Zhu. She points to the 2013 Target breach in which cyberattackers stole the personal information of millions of customers. Zhu says her research found that after the breach, drivers were more likely to drop usage-based auto insurance.

Nevertheless, UBI seems to be gaining traction. A J.D. Power study showed 10 percent of insurance customers used such programs in 2018, up from 8 percent the previous two years. Though the policies aren't universally available, the National Association of Insurance Commissioners estimates 7 in 10 auto insurers will use monitoring technology by next year.

FacebookTwitterGoogle+LinkedIn25 cheapest cars to insure FullscreenPost to FacebookPosted!

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To determine the 25 Cars with the lowest insurance costs, 24/7 Wall St. reviewed data on insurance claim payments made by insurers by make and model, provided by the Insurance Institute for Highway Safety, a nonprofit research organization funded by auto insurers. The costs include six types of insurance: collision, property damage, comprehensive, personal injury, medical payment, and bodily injury. The model that is most expensive to insure had the highest overall average cost to the insurer per year. These data are for 575 vehicles of 2014-2016 model years sold in the United States. Average annual insurance payments account for both the frequency of accidents, as well as the average payment made, by model. No.25. Toyota Sequoia four-door 4WD: Annual average insurance paid: $719.60; Annual collision insurance paid: $319.80; Type: Large SUV; Retail price: $48,400. Toyota, ToyotaFullscreen24. Chevrolet Traverse four-door 4WD: Annual average insurance paid: $716.68; Annual collision insurance paid: $284.70; Type: Large SUV; Retail price: $47,500. Jim Frenak-FPI StudiosFullscreen23. GMC Acadia four-door 2WD: Annual average insurance paid: $712.83; Annual collision insurance paid: $304.20; Type: Large SUV; Retail price: $29,000. Jim Haefner, General Motors, via APFullscreen22. Ford Edge four-door 2WD: Annual average insurance paid: $693.74; Annual collision insurance paid: $304.20; Type: Midsize SUV; Retail price: $29,315. Mandi Wright, Detroit Free PressFullscreen21. Ford F-150 SuperCab 4WD: Annual average insurance paid: $690.91; Annual collision insurance paid: $273.00; Type: Large pickup; Retail price: $27,705. Steve Petrovich, Detroit Free PressFullscreen20. Toyota 4Runner four-door 4WD: Annual average insurance paid: $688.12; Annual collision insurance paid: $292.50; Type: Midsize SUV; Retail price: $34,610. David Dewhurst, ToyotaFullscreen19. Ford F-250 SuperCab 4WD: Annual average insurance paid: $684.51; Annual collision insurance paid: $249.60; Type: Large pickup; Retail price: $33,150. Ford Motor Co.Fullscreen18. Subaru XV Crosstrek 4WD with Eyesight: Annual average insurance paid: $680.94; Annual collision insurance paid: $288.60; Type: Small station wagons/minivans; Retail price: $21,595. Frederic J. Brown, AFP/Getty ImagesFullscreen17. Mini Countryman 4WD: Annual average insurance paid: $680.94; Annual collision insurance paid: $312.00; Type: Small station wagons/minivans; Retail price: $26,600. None, MiniFullscreen16. Honda Odyssey: Annual average insurance paid: $680.40; Annual collision insurance paid: $296.40; Type: Large station wagons/minivans; Retail price: $29,990. Honda via APFullscreen15. Honda CR-V four-door 4WD: Annual average insurance paid: $678.46; Annual collision insurance paid: $269.10; Type: Small SUV; Retail price: $24,250. HondaFullscreen14. Honda Pilot four-door 2WD: Annual average insurance paid: $677.38; Annual collision insurance paid: $284.70; Type: Midsize SUV; Retail price: $30,900. Honda, HondaFullscreen13. Nissan Leaf electric: Annual average insurance paid: $675.03; Annual collision insurance paid: $319.80; Type: Small four-door; Retail price: $29,990. NissanFullscreen12. Chevrolet Corvette convertible: Annual average insurance paid: $671.58; Annual collision insurance paid: $417.30; Type: Midsize sports cars; Retail price: $55,495. Alan VanderkaayFullscreen11. Subaru Legacy 4WD with Eyesight: Annual average insurance paid: $667.79; Annual collision insurance paid: $296.40; Type: Midsize four-door; Retail price:$22,195. Scott Olson, Getty ImagesFullscreen10. Volvo XC60 four-door 2WD: Annual average insurance paid: $665.28; Annual collision insurance paid: $315.90; Type: Midsize luxury SUV; Retail price: $41,500. Cyril Zingaro, APFullscreen9. Ford Expedition four-door 2WD: Annual average insurance paid: $660.16; Annual collision insurance paid: $284.70; Type: Large SUV; Retail price: $51,790. Ford Motor Co.Fullscreen8. Acura MDX four-door 2WD: Annual average insurance paid: $660.06; Annual collision insurance paid: $280.80; Type: Midsize luxury SUV; Retail price: $44,200. AcuraFullscreen7. Mazda CX-5 four-door 2WD: Annual average insurance paid: $649.78; Annual collision insurance paid: $245.70; Type: Small SUV; Retail price: $24,150. MazdaFullscreen6. Jeep Wrangler two-door SWB 4WD: Annual average insurance paid: $647.85; Annual collision insurance paid: $206.70; Type: Small SUV; Retail price: $23,995. Fiat Chrysler Automobiles via APFullscreen5. Subaru Forester four-door 4WD with Eyesight: Annual average insurance paid: $645.85; Annual collision insurance paid: $273.00; Type: Small SUV; Retail price: $22,795. Uncredited, Subaru via APFullscreen4. GMC Canyon crew cab 4WD: Annual average insurance paid: $633.70; Annual collision insurance paid: $257.40; Type: Small pickup; Retail price: $21,100. Jim Fets, GMCFullscreen3. Chevrolet Silverado 1500 4WD: Annual average insurance paid: $620.47;; Annual collision insurance paid: $253.50; Type: Large pickup; Retail price: $28,300. GMFulls