The majority of insurance quotes are based on the assumption that you will be driving more than 6000 miles a year. However, if you do not use your car that regularly, then chances are you won’t be racking up this much mileage a year.
If this is the case then you may find Norwich Union’s “Pay As You Drive” insurance more suitable, which boasts a saving of up to 30% over conventional car insurance.
With this system the driver pays an up-front fee, usually a fraction of the standard policy, and then is charged monthly based upon individual driving habits.
A Global Positioning System (GPS) is fitted to the car which enables the insurer to monitor how far the car has been driven, the type of road used and the time of each journey. With this information, they are then able to calculate a monthly bill.
The service offers two packages, one aimed at 18 to 23 year olds, and the second aimed at 24 to 65 year olds.
The cost charged for each mile can vary considerably depending on the time of day and road used. For instance, both of the packages discourage night-time driving, with the peak hours being between 11pm to 6am.
As for location, a higher charge is usually made for miles incurred in built up areas.
Currently it would seem that younger drivers are likely to get the most benefit from the system, with conventional insurance for new drivers often ludicrously high.
Unlike the upper age bracket, those aged between 18 and 23 get 100 free miles a month, which further helps to bring down overall costs.
Liam is a UK author, currently focusing on car insurance. Compare cheap car insurance and motor insurance online today.
Liam G is a UK financial author, currently focusing on Credit Cards and Secured Loans.
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