How Big Automakers Are Making Money on Your Driving Data

Carmakers and data firms are monetizing driving data from millions of Americans, sometimes without them knowing it, according to a New York Times report.

It’s a practice that many drivers might not be aware of: With the rise of Internet-connected cars, some prominent automakers, including General Motors (G.M.), Honda, Kia, and Hyundai, are collecting data from drivers, including when they drive and if they speed or brake sharply.

The automakers could then send the details they collect to global data brokers like LexisNexis, which create individual reports that car insurance companies could use to potentially justify higher rates.

“This is not happening to everyone,” the journalist behind the Times report, Kashmir Hill, told CNBC. “There are some automakers who have created these features in their car apps and they’re called driver score, or driver feedback.”

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Hill discovered the story while reading posts from drivers in car forums who were surprised that their insurance rates were going up, and even more surprised to learn that such precise data was being collected about them.

The program with G.M. is called Smart Driver, and though it is pitched as an optional, free feature, customers who talked to The Times said they were unaware they had signed up for it.

“With General Motors specifically, some people said ‘I never turned on Smart Driver’,” Hill told CNBC. “It seems that they were enrolled unknowingly, maybe at the dealership. You know, the salesperson turned it on because they get bonuses for enrolling people… in Smart Driver.”

A G.M. consultant program manual from 2023 confirms that Smart Driver enrollment is a qualifier for a bonus.

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In the report, a Cadillac driver from Florida, who remained unnamed because they are considering taking legal action against G.M., said they were denied car insurance in December by seven companies, with one pointing to his LexisNexis report, which recorded times of hard braking and hard accelerating.

“I’m not sure how the car defines that,” they told The Times. “I don’t feel I’m driving aggressively or dangerously.”

The driver was finally able to secure car insurance through a private broker — at double the rate they had been previously paying.

When they looked at the paperwork from the purchase of his Cadillac, there was no mention of Smart Driver, and they weren’t aware they had been enrolled in the program, they said.

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G.M. has had a relationship with LexisNexis since 2019. The automaker confirmed to The Times that it shares details about drive time, speeding, hard braking, and hard accelerating with LexisNexis and another company called Verisk, which is an insurance rating bureau.