What a connected vehicle is and why it matters to your finances

A connected vehicle is a car that uses internet access to send and receive data — about its location, how it's being driven, maintenance needs, and sometimes your personal information. Most new cars sold today have this capability built in, whether through a manufacturer's app, a phone connection, or a built-in cellular system. The connection happens automatically; you don't have to opt in to the hardware itself.

This matters to your finances because connected vehicles create costs you may not expect, change how much your insurance will cost, affect what happens if the car breaks down, and create privacy risks that could expose your financial information. Understanding what data your car collects and who can access it helps you make decisions about which vehicle to buy, what subscriptions to pay for, and how to protect yourself.

Key Takeaways

  • Connected vehicles collect location data, driving behavior, and maintenance information that manufacturers, insurers, and sometimes third parties can access.
  • Many connected features require paid subscriptions — remote start, emergency services, navigation updates — that can cost $100 to $300 per year beyond your car payment.
  • Insurance companies increasingly use connected vehicle data to adjust your rates based on how you drive, which can lower or raise your premium significantly.
  • Your vehicle's data can be sold, hacked, or subpoenaed, so understanding your manufacturer's privacy policy and opting out of data sharing where possible protects your financial and personal information.
  • Older used cars without connectivity avoid subscription costs and data collection, but connected vehicles may hold their resale value better if the features remain desirable to buyers.

What data connected vehicles collect and who sees it

Connected vehicles typically record your location in real time, how fast you're driving, when you accelerate or brake hard, how often you use the car, and when maintenance is needed. Some systems also capture audio from inside the cabin if you use voice commands or hands-free calling. This data flows to the manufacturer's servers, and sometimes to insurance companies, roadside information providers, and law enforcement if they request it.

The manufacturer's privacy policy determines what happens next. Some companies delete location data after a set period; others keep it indefinitely. Some sell anonymized driving data to third parties for traffic analysis or insurance pricing; others don't. You can usually find this policy on the manufacturer's website, though the language is often dense. The key question to ask: can the company share your data with insurers, advertisers, or data brokers? If yes, your driving habits may influence your insurance rate or be sold to other companies.

Law enforcement can subpoena vehicle data without your knowledge. If you're in an accident or under investigation, police can request your car's location history, speed records, and braking patterns from the manufacturer. This data has been used in criminal cases, so understanding that your car's records exist is important if you're ever involved in a legal situation.

Subscription costs that come with connected features

Many connected features require annual or monthly payments beyond your car loan or purchase price. Remote start (starting your car from your phone), emergency calling, real-time traffic navigation, and remote diagnostics often come with a subscription. Costs vary widely: some manufacturers bundle these into a single annual fee of $100 to $300, while others charge separately for each feature, which can add up to $500 or more per year.

When you buy a used connected vehicle, the previous owner's subscription may expire, and you'll need to renew it to keep using those features. Some manufacturers offer a trial period (often three years) for new car buyers, then charge after that. Read the fine print on any vehicle you're considering: ask the dealer or check the manufacturer's website for the full list of features that require payment and what those payments are. A car that seems affordable at purchase can become expensive if you want to keep using the features you expected to have.

Some features, like navigation updates, may require a subscription to stay current. If you don't pay, your maps could become outdated, which affects your ability to find new businesses or routes. This is different from a smartphone, where you can use free mapping apps; your car's built-in system may not offer that flexibility.

How connected vehicle data affects your insurance rate

Insurance companies increasingly offer discounts for letting them monitor your driving through your connected vehicle or a separate app. These programs track how fast you drive, how hard you brake, whether you speed, and what time of day you drive. If your driving is cautious, your rate may drop 10 to 30 percent. If your driving is risky by their standards, your rate may increase or the discount may not explore.

The catch is that this data is permanent. Once an insurer has a record that you sped or braked hard, that information stays in their system and can affect your rate for years, even if your driving improves. Some insurers share this data with other insurers or use it to deny renewal. Before you agree to let your vehicle or phone report to your insurance company, understand exactly what behaviors they're tracking and how long they keep the data.

If you don't want your insurer to monitor you, you can usually decline these programs, but some insurers are making them mandatory for new policies or offering discounts so large that refusing feels like paying a penalty. Shop around: some insurers don't use telematics (the technology that monitors driving) at all, so you have options if privacy or rate control matters to you.

Data breaches and hacking risks with connected vehicles

Because connected vehicles store location data and can control functions like locks and engines, they're targets for hackers. A breach could expose your home address (if you've navigated there), your work location, your daily routine, and potentially your financial information if payment methods are stored in the vehicle's system. In some cases, hackers have remotely disabled vehicles or unlocked doors.

Manufacturers are required to follow certain security standards, but standards vary and enforcement is inconsistent. Older connected vehicles may never receive security updates, leaving them vulnerable to attacks that newer models patch. If you're buying a used connected vehicle, ask the dealer whether the manufacturer still provides security updates for that model year.

You can reduce risk by keeping your vehicle's software updated (manufacturers usually push updates automatically, but check your settings), using a strong password for any manufacturer app, and avoiding connecting your vehicle to public Wi-Fi networks. Some people disable connectivity features they don't use, though this may require a dealer visit and could affect resale value.

Opting out of data collection and sharing

Most manufacturers allow you to opt out of data sharing with third parties, though opting out of all data collection is usually not possible — the car needs to communicate with the manufacturer for safety features and recalls. To find your options, check your vehicle's settings menu (often under Privacy or Connected Services) or log into the manufacturer's app or website.

Opting out typically means the manufacturer won't sell your data to insurers or advertisers, but they may still collect it for their own use and may still comply with law enforcement requests. Some features, like emergency calling, require data sharing to work at all. Read what each setting controls before you change it; disabling the wrong thing could turn off a safety feature you want.

If you're uncomfortable with data collection, consider buying an older used vehicle without connectivity, or a new vehicle from a manufacturer with a strong privacy policy. Some manufacturers are more transparent about data use than others, and this information can influence your purchase decision.

Connected vehicles and resale value

Connected features can increase a used vehicle's resale value if buyers want them, but they can also decrease value if the subscription has expired or if buyers are concerned about privacy. A car with active, working connected features (navigation, remote start, emergency services) may sell for more than an identical car without them. However, if the subscription has lapsed and the new owner has to pay to reactivate it, they may offer less.

Some buyers specifically seek out older vehicles without connectivity to avoid subscriptions and data collection. This creates a market where connected and non-connected vehicles appeal to different buyers. When you're deciding whether to buy a connected vehicle, consider not just what you'll pay now, but what the car will be worth when you sell it and whether future buyers will value or resent the connectivity.

If you're selling a connected vehicle, disabling your personal data and accounts before the sale protects your privacy. Most manufacturers have a process for this; check their website or contact the dealer. Failing to remove your data could leave your location history, phone contacts, or payment information accessible to the new owner.

Frequently Asked Questions

Can I turn off the internet connection in my connected vehicle?

Most connected vehicles don't have a straightforward on-off switch for internet. You can usually disable specific features (like data sharing or remote services) through the settings menu, but the car's core systems remain connected for safety recalls and emergency services. If you want no connectivity at all, you'd need to buy a vehicle without the hardware, which limits your options among new cars.

Will my insurance company know if I disable the telematics device?

If you're enrolled in a monitoring program, disabling the device or removing it usually triggers a notification to your insurer. They may cancel the discount, increase your rate, or drop your policy depending on your agreement. Read your policy documents to understand what happens if you opt out, and contact your insurer before you disable anything.

What should I do if I'm concerned about my vehicle's data being hacked?

Keep your vehicle's software updated by checking the manufacturer's website or app for available updates. Use a strong, unique password for any manufacturer account. Avoid connecting to public Wi-Fi networks through your vehicle. If you believe your vehicle has been hacked (for example, if features set up on their own), contact the manufacturer's customer service and consider having a dealer inspect the system.

Do I have to pay for connected features if I don't want them?

You can't avoid the hardware in a new connected vehicle, but you can usually avoid paying for optional features like remote start or premium navigation. Basic connectivity for safety and recalls is typically included. Before buying, ask the dealer which features require payment and which are included, so you know the true cost of ownership.

How long do manufacturers keep my vehicle's location data?

This varies by manufacturer and is detailed in their privacy policy. Some delete location data after 30 days; others keep it for years. Check the privacy policy for your specific vehicle's manufacturer on their website. If you can't find clear information, contact their customer service and ask directly how long they retain location history.