The often astronomical insurance premiums for newly-qualified young drivers could be cut by up to £700 a year if "black boxes" are fitted in their cars.
The initiative will be championed by David Cameron today at a Downing Street seminar to find ways of halting the steady increase of the cost of insuring a car.
The tamper-proof smartboxes, usually installed under the bonnet, use satellite navigation and G-force technology to monitor young motorists' speed, as well as braking, acceleration and cornering and how often they drive at night. Full details of their behaviour on the road are updated every 90 days.
Co-operative Insurance, which launched the scheme last year, said motorists aged 17 to 25 with a black box in their car were less likely to be involved in a crash – and any accidents they had were less serious.
They can typically receive more than £500 reduction in their initial premium in return for having the device fitted – and a further £100 to £200 if they drive carefully and safely.
Now the Prime Minister will back calls for "telematics" to be rolled out more widely across the industry.
David Neave, the Co-op's director of general insurance, said: "The cost of insurance has hit an all-time high, especially for young drivers who feel that they are being priced off the road. Currently many young motorists who drive safely are picking up the tab for the ones that drive recklessly. However, the black box allows people to pay a fair and personalised price for their cover, determined by how well they drive."
Other ideas to be discussed by Mr Cameron and senior figures in the insurance industry include a zero alcohol limit for young drivers and introducing a minimum period between receiving provisional driving licences and taking a test.