General Motors announced Thursday it had finalized a $220 million settlement regarding its OnStar Smart Driver program, closing the book on what executives called a phenomenally profitable multi-year initiative to sell customers' driving habits to insurance companies. The automaker noted that the payment barely dents the margins of its core business of harvesting braking data.
General Motors confirmed Thursday it had agreed to a $220 million settlement to resolve class-action lawsuits over its OnStar Smart Driver program, assuring investors that the penalty represents merely a fraction of the revenue generated by transforming millions of unsuspecting commuters into a highly lucrative data pipeline. The Detroit-based manufacturer praised the legal resolution, noting that the company had long budgeted for the eventual cost of its customers discovering their vehicles were acting as confidential informants.
According to court documents, GM quietly enrolled millions of drivers into the telemetry program, harvesting granular details on hard braking, rapid acceleration, and late-night highway speeds. The raw data was then bundled and sold wholesale to brokers like LexisNexis and Verisk, ensuring that owners who purchased a new Buick Enclave were immediately rewarded with a spiked insurance premium for tapping their brakes at a yellow light.
We view this $220 million payout as a routine customer acquisition cost, except in this case the customers we acquired were massive insurance conglomerates and the product we sold them was your morning commute.
Under the terms of the agreement, affected GM owners will receive a one-time settlement check for roughly $14.50. Financial analysts noted the payout can be used by drivers to partially offset the $900 annual premium increase that resulted from their own vehicle reporting them to their actuary for merging too aggressively. The company confirmed that future data-sharing will require explicit consent, which will be conveniently located on page 47 of the infotainment system's mandatory initial setup wizard.
Following the settlement, GM engineers were reportedly finalizing the software roadmap for the 2026 Chevrolet Silverado, which will feature an upgraded API designed to pre-emptively deny the owner’s collision claim before the airbags have even fully deployed.