All driving licence records are being put online from this spring.
Cheapercar insurance is expected to result from the Government's My Licence project, with premiums likely to be slashed by £15 a year.
Insurers cannot currently check licence details when they sell policies.
So they have to factor in the possibility that motorists either lie to them about endorsements to get lower quotes, or just make an error.
But the DVLA's new system due in March will enable them to access data through the gov.uk website using a driver's licence number, national insurance number and postcode.
The Association of British Insurers calculates that this move could help honest drivers save £15 on premiums.
Vehicle hire firms will also have their administrative time lessened, by being able to check motorists' details online rather than over the phone.
The paper equivalent to the driving licence card will be phased out by next year.
Copyright Press Association 2014