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.
Wondering what to look for when buying a used car? We talk you through our used car checklist with everything you should be aware of, from MOT and car tax to insurance.
Doing a stolen car check before you buy will give you peace of mind. Read our guide on how to check if a car is stolen for more information.
Looking to protect your car? A car warranty can help cover costs that come with repairs. We’re here to tell you what you need to know.
Looking for a car that puts your safety first? You’re not alone! Whether you’re trying to keep your family safe or just looking for a reliable car, safety is an important factor. And it’s more important than ever.
The festive season brings plenty of reasons to hit the road, but can you organise flexible short-term cover?
Insurance Premium Tax (IPT) is a tax on general insurance premiums, added to the cost of car insurance policies by insurers.
Page last reviewed: 16 October 2024
Reviewed by: Louise Thomas
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