Your Guide to Pay-Per-Mile Car Insurance
Pay per mile car insurance is the newest kid on the block, designed for those who cover low mileage or want flexibility. Motorscan’s ultimate guide brings together all the nuts and bolts of what this insurance is, how it works and who can benefit. Who says you have to do car insurance the traditional way?
Pay per mile insurance isn’t one of the more traditional types of insurance we’re used to hearing about, such as third party or fully comprehensive. So, with that in mind, Motorscan has assembled everything you need to know about what pay per mile insurance is and who can benefit from it.
Sometimes known as pay as you go or pay as you drive insurance, it ultimately charges you for each mile or hour driven. In addition, there is an annual or monthly cost to cover the vehicle against fire, damage or theft while parked and to satisfy your legal obligation to insure your car at all times, as you won’t always be on the move. Pay-per-mile car insurance is usually a rolling subscription and is very flexible, so you can quickly amend or cancel it if required.
It may not be apparent at first glance, but pay per mile insurance offers many benefits, including:
The premise for this is a risk-based calculation: The more miles you drive, hypothetically, you’ll more likely have an accident, so the more expensive your premium is.
The tech behind this newest car insurance product is a telematics-based system using GPS and motion sensor software and your vehicle’s onboard OBD port to transmit your driving data, including the number of miles you drive, back to your insurer. It will also measure acceleration, cornering speed, braking, how long you drive and where you drive. Indeed, if you exhibit safe driving behaviour, some insurers will offer discounts.
Of course, if you own a smart vehicle with connectivity like a Tesla, there’s no need for a telematics black box as your car simply connects to your account held with a qualifying insurer such as By Miles. To find out more about their Connect Policies, visit By Miles FAQs.
Unlike traditional car insurance, pay-as-you-go per-mile insurance charges you for the miles you drive, saving money when you don’t. Consequently, it makes this an ideal insurance option for low mileage drivers and those looking for temporary car insurance, but also perfect for many others, including if:
This untraditional car insurance is highly beneficial, especially if you’re a low-mileage driver that covers less than 7000 miles a year. You’ll be billed monthly instead of a hefty yearly premium, including a small premium to cover the vehicle when parked and the cost incurred for the miles driven, usually a few pennies per mile. And with technology ever involving, pay as you go insurance will likely become a very common insurance option in the future.
Companies that offer pay per mile insurance include:
