The Hidden Dangers of Car Data: How Your Vehicle is Spying on You and Costing You Money
TLDR: Car manufacturers are collecting extensive data on drivers, often without clear consent. This data is sold to insurance companies, potentially raising rates for drivers. Lawsuits are emerging as consumers seek accountability and regulation in the automotive data industry.
In today’s digital age, privacy concerns have reached new heights, and one of the most surprising culprits is your car. Many drivers are unaware that their vehicles are constantly recording data about their driving habits and personal information. This blog post explores how car manufacturers are collecting and selling this data, the implications for drivers, and the ongoing legal battles surrounding these practices.
The Data Collection Process
Every time you start your car, buckle your seatbelt, or accelerate, your vehicle is likely recording this information. Car companies claim that they use this data for legitimate purposes, such as recalls and maintenance. However, the reality is far more concerning: they are selling this data to third parties, including insurance companies.
The Case of Mike Terrana
Mike Terrana, a Chevy Bolt EUV owner, discovered the extent of data collection when he read an article about GM’s OnStar service. Concerned about his privacy, he requested his data, expecting to find mundane information. Instead, he was shocked to see detailed records of his driving behavior, including harsh stops and near-miss collisions, which were inaccurately attributed to his cats running in front of his car.
The Permissive Privacy Policies
The automotive industry’s approach to privacy can be summed up in one word: permissive. In 2023, the Mozilla Foundation conducted a study revealing that all 25 car brands reviewed collected more personal data than necessary and failed to meet basic security standards. Privacy policies often contain extensive legal jargon, making it difficult for consumers to understand what they are consenting to.
The Complexity of Consent
Justin Sherman, a data privacy expert, emphasizes that most consumers do not read or comprehend these lengthy privacy policies. The idea that this constitutes informed consent is misleading. Car manufacturers argue that their practices are outlined in these documents, but the reality is that many drivers are unaware of the extent of data collection and its implications.
The Data Pipeline to Insurance Companies
Once data is collected, it is packaged and sold to data brokers like LexisNexis and Verisk. These companies analyze the data and create risk scores that can significantly impact insurance rates. For instance, behaviors such as hard braking and quick accelerations can lead to higher premiums, often without the driver’s knowledge.
The Impact on Insurance Rates
Since 2019, car insurance rates have increased by over 40%. While various factors contribute to this rise, many believe that the data collected from vehicles plays a significant role. Mike’s experience illustrates this point: after his data was shared with his insurance company, he noticed a substantial increase in his rates.
Legal Challenges and Consumer Rights
As awareness of these practices grows, several states have taken legal action against car manufacturers. Arkansas, Nebraska, and Texas have sued General Motors and OnStar, alleging deceptive tactics in building their data pipeline. These lawsuits highlight the need for clearer regulations regarding data collection and consumer consent.
The Role of the FTC
In 2025, the Federal Trade Commission (FTC) responded to these concerns by banning GM from selling driver data for five years. The FTC also mandated that companies obtain affirmative consent before tracking and allow consumers to opt out. However, many consumers, like Mike, find that even opting out does not prevent data collection.
The Need for Comprehensive Regulations
The current regulatory landscape is inadequate. The Fair Credit Reporting Act, which governs data collection practices, is over 50 years old and ill-equipped to address the complexities of connected cars. There is a pressing need for comprehensive regulations that establish clear standards for data collection and usage in the automotive industry.
Legislative Efforts
In 2024, a bipartisan group of senators proposed legislation aimed at addressing these issues. The proposed laws would require explicit consent, establish national standards, and create real rules around what car manufacturers can collect and sell. Until such regulations are enacted, companies will continue to operate under their own rules, often at the expense of consumer privacy.
Conclusion
The reality is that your car is likely spying on you, and the data collected can have significant financial implications. As consumers become more aware of these practices, it is crucial to advocate for stronger regulations that protect privacy and ensure transparency in the automotive industry. The fight for consumer rights in the face of invasive data collection is just beginning, and it is essential for drivers to stay informed and engaged in this critical issue. .