DRIVERS could save hundreds a year by paying for their insurance by the mile. Here’s how the premium works.
Car insurance still remains as one for the biggest expenditures associated with car ownership.
Premiums are there to protect you if you have a crash or an accident and are based on multiple factors.
Insurance premiums have not changed drastically over the past few decades and are perhaps not necessarily tailored to every driver.
While you can now estimate and adjust your mileage, you could significantly under or over estimate how far you’re likely to travel by car in a year.
Similarly, your needs could change and you may need to drive significantly more than you thought.
This can do two things: invalidate your car insurance and can also cost you significantly more at the end of your lease.
Drivers could be spending more than they need to on their insurance for this reason.
However, a new pay per mile service could be a viable solution to this problem.
Insurance firm By Miles offers this service and claims that drivers that travel under 7,000 miles a year will mote than likely pay less with a pay-per-mile policy.
“It gives you that flexibility to do a fair comparison before you start a journey – to say, ‘Shall I walk it, shall I take the bus, or shall I take the train?'” says the company’s chief executive James Blackham.
One driver using one of these policies claims that it saved him between £100 and £150 a year – which equated to 20 per cent of his annual premium.