You pay a base rate for your cover, which you can pay either annually or monthly. This base rate is usually cheaper than what you’d pay for standard car insurance.
You're then given a monitoring device that's either fitted to your car or an app you download to your phone. It tracks the number of miles you drive each month, and you're billed at a pre-agreed rate for each one. So it can work out cheaper for occasional drivers.
It’s not the same as a telematics policy, which monitors how you drive as well as your mileage. Pay-as-you-go or pay-per-mile car insurance policies only look at the distance you travel.
Some providers only offer comprehensive cover on their pay-as-you-go insurance policies. But others let you choose the level of cover you want depending on what you need:
Third-party
Third-party, fire and theft
Comprehensive
***Confused.com Q3 2024 price index data
**Single annual policy. New and former Paramount+ subscribers only who sign up at ParamountPlus.com. Subscription required. Auto-renews unless cancelled. 18+. Just Eat website account required, geographical exclusions apply. The year-round reward is provided by Greggs, and consists of one regular hot drink per month for a year, only available via the Confused.com app. T&Cs apply.
"By only paying for the miles you drive, your insurer gets a more accurate idea of your driving. It can be a great way to save money if you're just starting out or if you're an older driver who doesn't use the car much.
If you're worried about keeping track of your mileage, most pay as you go policies will make it easy for you to keep track of your driving and even top-up with extra miles if you need to."
Is a legal requirement if you're driving in the UK. Find out more about choosing the right cover at the right price.
Lets you prove you're a safe driver, and save money on your policy, even if you're inexperienced or seen as high risk.
Yes. Most pay per mile policies are rolling subscriptions, so you can usually cancel them fairly easily if your circumstances change. Just be aware that you may have to give notice to do so.
Once you’ve cancelled, you’ll then be able to take out a traditional car insurance policy - which might end up cheaper if you’re driving a lot of miles.
This depends on the provider, so it’s worth checking with your insurer to see how they can help.
You’ll need more than just car insurance to work as a food delivery driver too. You’ll usually need business car insurance, alongside some courier-specific policy extras like courier insurance and goods in transit insurance. You might even need public liability insurance. Check with your employer to see exactly what you need in place.
It’s unlikely that you have a curfew on a pay-as-you-go car insurance policy. Curfews are typically only imposed on black box policies, which monitor how, when and how far you drive.
Pay as you go policies only track the number of miles you travel. So in most cases, the time of day you drive is irrelevant.
Insurance Premium Tax (IPT) is a tax on general insurance premiums, added to the cost of car insurance policies by insurers.
You'll need to pass a driving theory test before booking your practical exam. We'll give you the lowdown on what to expect, how to book and tips for passing.
Tips for driving at night, from handling glare to staying alert. Learn how night driving impacts your car insurance and what cover you might need.
Car insurance premiums have fallen annually for the first time in almost 3 years. New figures show a 7% decrease in prices compared to this time last year, on average.
Find out how many drinks you can have and still be okay to drive. We also look at what your options are if you're unsure or over the drink-drive limit.
Temporary car insurance has got you covered this half-term and Halloween. No jump scares here!
Page last reviewed: 16 October 2024
Reviewed by: Louise Thomas
cookie usage
We use cookies, some of which are essential to make our website work. For us to use our non-essential cookies, we need your consent. You can consent by accepting all or alternatively, manage your cookies at any time. For more information, read our cookie policy.
