A connected car is a vehicle capable of accessing the internet to provide features such as navigation, diagnostics, safety services, infotainment, and Wi-Fi for passengers. Connected cars are part of the Internet of Things (IoT), which is the concept that objects or devices can communicate with each other via the internet in a sort of electronic ecosystem

As the years go on, connected cars will get more advanced and are expected to ultimately become autonomous vehicles. Your children may never need to learn to drive if projections about self-driving cars with full automation are accurate. 

One hot trend in the automotive industry is the telematics device, which many insurance companies offer as a way to reduce costs. These devices can measure mileage and driving behavior to potentially give drivers access to lower insurance premiums or cash back on their policies. 

While telematics devices can be a great option for safe or infrequent drivers looking to reduce their insurance costs, they’re not the only option for getting cheap car insurance. You may be able to get a lower premium just by switching providers. 

That’s because every insurance company weighs your information differently, and some will be able to offer cheaper rates than others. If you don’t want to spend hours researching quotes, check out Insurify. You just need to enter your information once, and you’ll be able to compare customized quotes from a variety of different insurance providers. 

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What are connected cars?

Connected cars can connect to the internet, typically through a wireless local area network, which allows these cars to communicate with other connected devices both inside and outside the vehicle using an over-the-air connection. A connected car provides a myriad of possibilities for convenience and safety. For example, with a connected car, you could:

  • Start your car remotely
  • Get real-time traffic alerts from your navigation system
  • Get automatic emergency help in the event of an accident
  • Access a 4G LTE Wi-Fi hotspot
  • Pay for your coffee directly from your vehicle
  • Receive warnings if systems in your car are on the verge of failure
  • Use voice commands to play music from your Bluetooth-connected smartphone through the vehicle’s speakers
  • Use an advanced driver-assistance system (ADAS) to help you park

History of Connected Cars

General Motors was the first car manufacturer to introduce built-in telematics with the OnStar debut in 1996. The system provided both security and automatic emergency response in the event of a crash. By 1997, OnStar also delivered remote diagnostics to Cadillac drivers. 

BMW entered the connected-car market in 1998 with what is now known as ConnectedDrive. This provided drivers with live traffic readings and the ability to place an emergency call

Audi began developing connect services in 2005, which led to mobile broadband internet access in Audi’s connected cars by 2009. And by 2015, Mercedes-Benz and Volvo began offering ways for drivers to connect with their vehicles through their smartphones. Porsche and Nissan followed with similar connected services. 

How does the current technology for connected cars work?

Connected cars work by accessing the internet to share data with other devices. Currently, that allows cars to connect to smartphones, access navigation and safety features, and even offer personalized assistance. For example, a connected car can show nearby gas stations when the fuel tank is low. 

The Future of Connected Cars

In the future, carmakers will build connected cars that will communicate not only with smartphones but also with other connected vehicles, traffic signals, and other infrastructure. Deciding on right-of-way at a four-way stop will become an instant decision as cars communicate with each other. And ultimately, cars will be able to drive themselves with minimal input from the driver. 

But before we have smart cities with autonomous cars, automakers will use existing connectivity and new technology to provide more advanced convenience and safety features to drivers. New cars are expected to have features like augmented reality dashboards, software that predicts traffic conditions, payments from within the vehicle, and digital license plates. And 5G will bring low latency and faster speeds to connected cars so they can process more data. 

Connected Cars and Telematics

Aside from connecting drivers to emergency assistance and providing mechanics with diagnostic information, a telematics system can receive, store, and share data about your location, speed, braking, and more. That functionality has disrupted the insurance industry. By collecting data on how frequently and how safely customers drive, insurance companies can better assess their risk. This allows insurers to offer discounts or cash back rewards to safe or infrequent drivers who they deem less likely to file a claim. 

Many insurance companies offer these discounts in addition to multi-policy discounts, accident-free discounts, payment discounts, good student discounts, and others. You can use Insurify to see which insurance providers can offer the lowest rates, including discounts you may be eligible for, and then check to see which of those companies offer an additional discount for installing a telematics device in your vehicle. 

Types of Connected Cars

Connected cars come in many different shapes and sizes.

Car Manufacturers with Connected-Car Service Features

Most car manufacturers, from Toyota to Ford, produce cars with connectivity, but some have more robust offerings than others. These manufacturers stand out from the pack: 

Manufacturer/Service Unique Features
  • Full web browser
  • Emergency braking
  • Collision warning
  • Blind-spot monitoring
  • Ready for self-driving upon regulatory approval
  • Remote start/stop, lock/unlock, honk/flash, and vehicle status
  • Automatic vehicle health updates and service reminders
  • Family Guardian alerts that monitor boundary areas, curfews, and speeds
  • Web browser built in
  • Heads-up display
  • Wi-Fi hotspot
  • Apple CarPlay preparation
  • Remote parking assist
  • Office features such as automated dial-in to conference calls
  • Live traffic information
  • Smartphone integration
  • Remote heat starting, locking, and more
  • Pilot assist and distance alert
  • Smartphone integration through Apple CarPlay and Android Auto
  • Wi-Fi hotspot
  • Send remote commands (like remote start) with Amazon Alexa and Google Assistant


AT&T Connected Car

AT&T allows you to buy unlimited data for your car through built-in or plugin hotspots. You’ll be able to connect up to 10 devices at once, so everyone in your family can choose their own entertainment. Prices start at $20/month or $10/month when added to an existing plan. 

Connected Car Wi-Fi by Verizon

This is similar to AT&T’s connected-car service, but it’s only available for specific vehicles. It provides Wi-Fi access for up to five devices at once. 

Carly Connected Car

Carly allows you to access information about your car’s health through your OBD port so you can get alerted when your car needs maintenance before potentially dangerous issues arise. With some cars, you can even perform certain maintenance procedures, such as a battery reset, from your smartphone. Together, these features help Carly users save an average of $500/year on maintenance costs. 

Raven Connected Car

Raven is an internet-connected dashboard camera that allows you to see what’s happening on the road or inside the cabin from anywhere. Raven will notify you and record video when your car is being towed, broken into, or hit by another vehicle. Raven will also save video when you are in a crash or when you gesture to the camera, and you’ll get time-lapses for every trip. As an added bonus, Raven provides turn-by-turn navigation and vehicle diagnostics. 

ZUS Connected-Car System

Nonda is a connected-car technology company offering several ZUS devices, including:

  • A vehicle health monitoring device
  • A phone charger that also monitors your car battery
  • A smart tire safety monitor with real-time leak alerts
  • A wireless smart backup camera
  • A key finder to help you locate your keys, your car, or your phone
  • A universal HD car audio adapter
  • A smart dashcam

Nonda also offers several connected-car services, including roadside assistance and a mileage log subscription. 

How to Set Up Your Connected Car

Here are some steps you can take to set up your connected car.

Select a Device

First, choose the device that meets your needs. Do you need Wi-Fi for your car or just something to keep tabs on your vehicle’s health? There is a range of devices available that can add a variety of safety or convenience features to your car. Once you’ve selected the device you need, compare prices and make sure you purchase it from a reputable retailer. 

Download the App

Many connected devices come with an app that’s free to use once you purchase the device. Once you have the device, look for the app and download it to your smartphone. If needed, create an account and register your device. 

Connect the Device to Your Car

Read the instructions that come with your device and look up a YouTube video if needed. Some devices simply plug into your OBD-II port, which is typically located beneath the steering column. 

Test and Troubleshoot

Make sure the device is working properly. If it’s not, visit the manufacturer’s website to find out what the problem is. If you’re still having difficulty, call customer support. Once your device is operating, you can access the safety and convenience features it offers. 

Connected Cars: Pros and Cons

Connected cars provide a ton of benefits and possibilities for the future, but they also expose drivers to unique risks, and there are other factors that currently limit their use. 

Pros Cons
    • Safety: Connected cars provide safety features such as emergency assistance and hazard warnings
  • Convenience: Connected cars can help you navigate to nearby gas stations, pay for your coffee, check your schedule, and more
  • Fun: Smartphone integration allows infotainment systems to become more robust
  • Traffic control: Eventually, if connected cars evolve to a self-driving fleet, research shows traffic flow will be improved by at least 35 percent 
  • Security risks: Connectivity exposes cars to hackers, which can lead to vehicle theft or worse; hackers can take control of the car
  • Time and money: It will take an enormous investment and years of planning to connect smart cars to smart cities

Connected Cars: Quick Questions

Are cars with Wi-Fi hotspots and connected cars the same thing?

A car with a built-in Wi-Fi hotspot is a type of connected car. Connected cars are cars that have internet connectivity. You can also buy a Wi-Fi hotspot that plugs into a vehicle if it doesn’t come with a built-in hotspot.

What are the best connected-car devices or companies?

According to 200 automotive executives surveyed by KPMG, BMW is the current leader in connected-car technology. But plenty of car manufacturers are introducing innovative technology. There is also a myriad of connected devices that can add new features to your car. Ultimately, the best solutions will depend on your connectivity needs.

How can I compare car insurance quotes for my connected car?

The easiest way to find car insurance for your connected car is to use Insurify to compare customized quotes from multiple insurance providers. After answering some questions, you’ll be able to toggle between coverage limits and deductible amounts to find the cheapest rate for the coverage you need.

Conclusion: How to get the best and cheapest car insurance


No two companies will give you the same rate, so if you’re looking for the lowest possible premium, your best bet is to compare quotes. Insurify can help you find cheap car insurance quotes without the hassle of calling agents or getting quotes from individual insurers’ websites. You just need to enter your information one time, and our artificial intelligence technology will quickly highlight the best deals for you. 


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Updated April 29, 2021

Lindsay Frankel is a full-time freelance writer specializing in personal finance and insurance topics. Her work has been featured in publications such as LendingTree, The Balance, Coverage.com, Bankrate, NextAdvisor, and FinanceBuzz. For the past year, she has written about car insurance for Insurify.