Pay Monthly ‘Pay As You Drive’ Motor Insurance

Pay As You Go Car InsurancePay as you go is a unique and trendy option when it comes to car insurance. Car insurance need not be expensive if you rarely use your car, and it not need be out of reach if you’re someone who is classified as belonging to a high-risk group but who is penalized with a high premium despite how little you drive.

As a solution to those who don’t drive frequently and who don’t want to pay the same price as someone who does drive regularly, many insurers have initiated what they call “pay as you go car insurance.”

The Black Box

This insurance gives car owners the option to only pay for the number of miles they travel by car. Mileage is monitored by a little device called a “black box” that is installed in a car. It measures both the speed of the car and the distance it has been driven. The information is sent back to the insurer, who then works out the premiums.

The black box is a sophisticated instrument that even measures the speed with which a driver rounds a corner or how strongly they accelerate, and this information can be used by insurers to calculate the premiums. However, for the most part, insurers charge for a specified number of annual miles.

If drivers exceed the designated miles, they will be allowed to purchase additional miles. These extra miles are sold in discrete units of 250 mile packages at a fixed price. This price rate is based on the driver’s age and motoring experience.

Who Benefits From Pay As You Go Motor Insurance?

The driving population who benefits from pay as you go insurance are the following types of people

  • People who are considered risky drivers by car insurance companies and who would normally have to pay high premiums if they had regular insurance.
  • Men under the age of 25 years old, who have a high premium rate due to the perception many insurers have that young men like to race on the roads.
  • Those who don’t drive during peak traffic hours and who are less likely to have accidents.
  • Retired people, stay-at-home parents, or those with poor health who have cars but rarely use them.

However, despite the many advantages of pay as you go car insurance, it is not for everyone. Specifically, it will not benefit the following types of people:

  • Drivers who tend to exceed the set number of miles because they would lose the advantage of the cost-effectiveness of this insurance.
  • Drivers who once drove only a few miles, but who have had a change in life and who now have to drive more miles. For example, someone may initially have signed up for pay as you go insurance because they only used their car for a short commute to work. However, if this person gets another job that now requires many more miles each day, the number of extra miles travelled each day will begin to add up.
  • Finally, the pay as you go plan is not for single car families that have multiple drivers. Despite differences in driving styles and miles, the rate is based on the most expensive driver.

Advantages of Pay As You Go Vehicle Insurance

There are numerous advantages pay as you go insurance has over regular insurance. Here are some of them:

  • It saves cash because a person only pays for the miles they use.
  • It reduces the number of miles people usually drive because they are aware that they have to pay for the miles that they use. Consequently, on many occasions they might decide to use public transportation to save on miles. This behaviour reduces traffic congestion on the roads and pollution from emissions.
  • People are likely to drive more safely because they are being monitored by the black box for aggressive driving. This increases the chances of getting charged higher premiums. On the whole, more safe drivers mean that there less likely to be accidents.
  • Stolen cars can be more easily recovered because the black box can be used as a tracker device.