Pay as you go car insurance is a relatively new option for drivers and is proving extremely popular with some people. It is particularly suited to young drivers, for whom normal annual premiums can be extremely expensive. It is also great for anyone else who does not have a regular pattern of driving or high mileage.
The system allows you to pay in proportion to the amount you actually drive, rather than paying a lot to cover everything you might possibly do over the course of a year. This pay as you go method is really for people who are not driving to work five days a week and whose mileage may be quite high one month, but hardly anything the next. This is perfect for young people and new drivers still living at home and only driving occasionally.
Any insurer will want to charge premiums based on the perceived risk of a claim. They will still be assessing your insurance on the basis of the usual factors such as age, where you live and what car you drive, but there are other factors used too, such as how much mileage you do, when you do it, what type of roads you drive on, what time of day you drive, etc. It is these other factors that you can save money on by only paying for what you actually do.
The more mileage you do the more risk there is that you will have a claim, and there is an increased risk of accidents at certain times of day. By only being charged for what you actually do, you can save money if you have a pattern of driving that does not pose too high a risk. Your premiums each month will reflect what you are actually doing, rather than some generalised assumptions that may include for risks you are not actually facing.
This new idea is only possible through satellite technology, which allows a box to be fitted into your car so that the insurer can have detailed information about your driving activity. While some people think this is a little too much like Big Brother, it is the only way that you can benefit from this option. If you want to be charged for what you actually do, then what you do has to be recorded in some way.
The device costs you nothing to fit and it sends the information required to the insurer direct with no effort required on your part. Depending on who you insure with, there are various ways that your premiums may be arranged. The most usual route with pay as you go is to have monthly premiums that are based on what you actually do. So if you drive a lot one month your premiums will be higher to reflect that, and if you are not out much as all, you will have much less to pay.
As with any type of insurance, it pays to shop around before making a decision on who to insure with. This is a rather specialist form of insurance, so you will need to find the companies that offer it, but it is not so specialised to be hard to find. Apply for quotes to a few companies and see which is cheapest, but always ensure you are being quoted on the same basis by each company, and check for any excess.