Pay As You Go Car Insurance 

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Pay as you go Car Insurance Guide

Pay as you go car insurance (PAYG) is a type of insurance where the premium is based on your actual usage of the vehicle. Instead of paying a fixed monthly or annual premium, your costs are determined by factors like the number of miles you drive. This can be a flexible option for those who don't use their cars frequently or want to have more control over their insurance expenses and save money.

Compare PAYG Car Insurance 

If you are looking for cheap PAYG car insurance, We can provide you with access to a range of quotes from a panel of insurance brokers.

In order to get the best deal on any insurance policy, it’s vital that you compare quotes from a wide range of insurance companies.

  • Cover available for all drivers young, old with and without convictions
  • Polices can be tailored to your requirements
  • Flexible payment options
  • One short form – save time & money

Types of pay-as-you-go car insurance

Pay how you drive

Pay how you drive car insurance is also known as telematics car insurance or black box insurance. In this type of pay-as-you-go car insurance policy, a technology is installed into your vehicle to monitor how you drive.

In this case, your insurance rate or premium will depend on the data collected from this device about your driving habits and performance.

Pay-per-mile insurance

In pay-per-mile car insurance, customers are charged based on their mileage. This implies that the more distance you cover with your vehicle, the more you pay.

A pay-by-mile policy is the most popular and common type of PAYG insurance. In some cases, you may also have to pay an additional monthly or annual fee if you want your car insured while it is parked

Pay per day/per hour

Pay-per-day car insurance is similar to pay-per-mile insurance. However, in this type of pay-as-you-go car insurance, insurers do not charge based on the mileage or distance covered.

Instead, your insurance rate will depend on how much time you spend driving. This kind of temporary car insurance can be used in a situation where you want to drive another person's car for a few weeks, days, or hours.

How Does Pay As You Go Insurance Work?

Pay-as-you-go car insurance policies are designed to charge drivers for actual vehicle usage. So, in most cases, you may be given a small device (black box) or asked to download an app that tracks how you use your vehicle.

In certain modern vehicles, it's also possible to directly link your pay-per-mile insurance provider to your odometer, allowing for easier tracking of your mileage.

Depending on the type of pay-as-you-go insurance policy you opt for, your insurer may also measure other things, such as your driving performance, speed limits, braking pattern, and the time of day you operate. With this driving data, your insurance provider can determine your premium.

Nevertheless, it is important to note that not all insurance providers will operate the same way. Some may have additional regulations like nighttime driving restrictions, etc. So, understand what your insurer uses to calculate your premium by asking directly, reading policy documents, understanding how the claims discount works, knowing what's included in the comprehensive cover, and checking out their terms and conditions.

Who Is Pay As You Go Insurance Aimed At?

  • Low mileage drivers who use their cars for short trips and have less than 6000 to 7000 miles annually.
  • Older drivers, example over 80s or even over 60s who are retired and now drive less than they used to. For infrequent drivers who own multiple cars that they drive once in a while.
  • For infrequent drivers who own multiple cars that they drive once in a while.
  • Remote workers who use their car only during the weekends or holidays.
  • If you prefer to commute by public transport during the working week, and only drive your vehicle on weekends.
  • For young drivers or new drivers who cover low mileage and cannot afford a fixed annual insurance policy.
  • Individuals or younger drivers who drive a family member's vehicle or parent's car occasionally.
  • Individuals with driving convictions facing big premium charges may benefit from a pay-as-you-go (PAYG) policy.

Please note that car insurance quotes for PAYG insurance may not be ideal for commercial vehicles, high risk and high mileage drivers, etc. In such situations, you may want to go for a cost-effective option like an annual policy from traditional car insurance that can help you save money.

Levels of Leicester Car Insurance Available and cover inlcluded

Similar to pay as you go taxi insurance, PAYG car insurance is available at three different levels, from basic third party to full comprehensive cover.

Third party

Third party cover provides the minimum level of cover required by law. This type of cover will only pay out to cover the repair or replacement of other peoples’ vehicles, damage to other people's property, including injury. This is the most basic cover and does provide cover to your own vehicle if in an accident, damaged by fire or stolen

Third party Fire and Theft

This level of cover provides minimum third party cover, but will pay out for the repair of your own vehicle if it’s damaged by fire or for the cost of replacement if it’s stolen.

Comprehensive

This level of cover includes all of the above cover but also, importantly, includes cover for any damage to your car even if you were at fault. Fully comprehensive policies may also provide minimum third party coverage to a trailer or caravan being towed. 

Did you know?  Pay as you go policies are ideal for classic cars that you only take out in the summer months

How much does pay-as-you-go insurance cost?

Similar to standard car insurance policies, a (pay-as-you-go) PAYG car insurance policy company considers various factors to determine your premium.

These factors include your car's make and model, personal details, driving history, location where you park your car overnight, occupation, and estimated yearly mileage.

To know which type of insurance policy will be less expensive for you, it's advisable to compare PAYG policies with traditional car insurance options.

Tips to get Cheaper PAYG Car Insurance Quotes

Take time to read and if possible take action to make savings on your car insurance!

  • Increase Excess : This is the amount that you will be liable for in the event of any claim, this can be increased in return for a reduced price, but reemeber you will have to pay this out if you do need to claim.
  • Explore insurance discounts : Look out for special offers or consider installing black box
  • Drive Safely : Driving with care will reduce the risk of being involved in a road accident, letting you accrue a no claims discount
  • Keep a Good Credit Score : If you have a bad credit score,  take steps improving your credit score
  • Make Security Improvements: Example by installing approved security devices like an alarm or immobiliser. Simple actions that help to reduce the risk of damage or theft can lower your insurance cost.
  • Choose to pay Annually: Whilst for many monthly car insurance makes budgeting easier, it is possible to pay insurance as a one off annual payment. This should help reduce the overall costs, as most insures will add an interest charges on monthly premium payments.
  • Don't Over Insure : Example if you have a car under 3 years old breakdown cover will likely be included for the first few years, so no need to include that in your insurance policy.  
  • Avoid Modifications: Making changes often results in a higher premium, particularly if you decide to map or reprogram the engine. Check first with your insurance provider before embarking on any type of mod., 

Get access to the PAYG car and van insurance options with Multi Quote Time. Simply Click Here, fill a simple form, and discover multiple quotes from several insurance brokers.

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Car Insurance Leicester

*51% of consumers could save £504.25 on their Car Insurance. The saving was calculated by comparing the cheapest price found with the average of the next five cheapest prices quoted by insurance providers on Seopa Ltd’s insurance comparison website. This is based on representative cost savings from September 2023 data. The savings you could achieve are dependent on your individual circumstances and how you selected your current insurance supplier.

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