What is pay-per-mile car insurance?
Pay-per-mile is a new way to pay for your car insurance and is designed for 25 to 78 year olds who drive less than 7,000 miles a year.
The concept is simple: the less you drive the less you pay.
Is it cheaper?
Like all car insurance – quotes will depend upon your individual circumstances, like how valuable your car is, or what sort of driving history you have.
At the same time, if you drive less than 7,000 miles a year it’s worth getting a quote to see if you could save.
Traditional insurance doesn’t always reward lower mileage drivers
The argument for lower mileage drivers getting cheaper insurance is simple enough. Provided you’re not a new or inexperienced driver then if you don’t drive much, you’re less likely to have an accident and so you should pay less. Simple.
However traditional car insurers find it tricky to keep track of your mileage so lower mileage drivers don’t necessarily get lower prices.
With pay-by-mile, the insurance provider uses the latest tech so it’s easy to see exactly how many miles you’ve driven and therefore charge on a per-mile basis. So when you do drive less, you actually end up paying less.
How Does it Work?
You pay a one-off annual fee to cover your car while it’s parked, after that you just pay for the miles you drive. Your mileage is automatically charged at the end of each month but unlike a monthly policy with a traditional insurance there aren’t any sky-high interest rate charges added on top.
This kind of billing helps to keep the price down and is also a more flexible option that helps you spread the cost of your insurance.
A further key aspect that many readers might like is that the price is based on the distance you drive, but not the way you drive. That means no “driver scoring”, so there’s no penalty if you break or accelerate a bit too hard – unlike many other ‘black box’ policies.
Also companies like By Miles have cost caps in place so you don’t get caught out. With By Miles, you can drive as much as you want, and you’re never charged for more than 150 miles a day or 10,000 miles per year. So if you take the long trip to the in-laws’ and drive 250 miles in a day, you’d be fully covered the whole time, but you’ll only pay for the first 150 miles.
Technology that Helps
Pay-per-mile car insurance is a nice example of technology evolving to make our lives a little easier and a little better.
When you take out a policy from By Miles, you’ll be sent a Miles Tracker in the post. However, the fact that it’s black is about the only similarity with the ‘black boxes’ you might have heard of before:
- The Miles Tracker is only about the size of a small matchbox – it’s quick and easy to plug into your car yourself, so you won’t need an engineer to fit it.
- You’ll be fully covered from your policy start date and there’s no charge for the miles you drive before the Miles Tracker arrives.
- As mentioned above – there’s no driving scoring.
- There are also no curfews or restrictions on when you can drive.
- Unless they get a court order, they won’t report any speeding to the police!
- The Miles Tracker powers a range of features in their smartphone app, like theft tracking and scanning your car for faults.
Remember – Your Quote is Just an Estimate
When you get a quote, By Miles will give you an estimated cost for the whole year, based on the miles you tell them you think you’ll drive in a year.
Importantly, there’s no penalty for driving more or less than your estimate.
After you’ve paid your upfront cost to cover your car while it’s parked, it’s totally pay-as-you-drive. That means if you drive less, then you’ll pay less than the estimate. If you drive a little more, then you’ll pay a little more than the estimate.
What’s the catch?
A pay-per-mile policy won’t suit everyone. If you drive more than 7,000 miles a year you’ll probably be able to find cheaper insurance elsewhere.
Also all polices are annual – there’s no option for short-term insurance or temporary cover.
Who can get a policy?
With By Miles, the policies are designed for 25 to 78 year olds, so while they cover most people it’s difficult to get cover outside this age range.
There also are a few other restrictions at the moment, mostly around people with higher risk profiles (like drivers with very expensive or high powered cars, or people with a number of claims and speeding tickets).
Find out if pay-per-mile could work for you
To find out more about By Miles, and see if pay-per-mile car insurance could work for you, click here to get a quick quote in under a minute.