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An essential guide to PAYG Car Insurance

Knowing how insurance policies work and where you can find the cheapest deals is no easy task. With hundreds of different types of policies across tens of industries, provided by thousands of companies it’s no wonder people get confused. In this guide we explain what PAYG (pay as you go insurance) is and how you can find a provider that is both cost effective and reliable should you ever need to claim.

What is PAYG insurance?

Pay as you go insurance means that you only pay insurance for the number of miles you drive. There is no lost money on insuring your car for when it’s out of use or sat on your drive. In particular this type of insurance is popular amongst young drivers who inevitably suffer higher premiums because of their age. You should note however that the more miles you drive the higher your premiums will be, so it may not be suitable for those that have a high monthly mileage.

PAYG insurance means that the insurer needs to track how many miles you travel, and to do this they fit what’s known as a telematics tracking device to your car; this device comes in the form of a little black box which communicates with the insurers, feeding back data on a daily basis as to how far you’ve travelled. It additionally tracks how you’ve been driving in terms of how safe a driver you are.

PAYG insurance means that you’re charged per mile, however providers may also charge these miles at different rates depending on the time that you’re driving; some times of the day will be deemed as ‘peak’ and others as ‘off peak’.

Finding the cheapest PAYG insurance deal

Using comparison websites

Comparison websites should be your first port of call in your search for a good insurance deal. Many of these websites allow you to narrow down your search to just those that offer PAYG insurance. You should however only take the comparison results as a start to your search, ensure that your read the terms and conditions attached to any potential policy.

Calling specialist insurers directly

It may be worthwhile to identify companies that specialise in PAYG insurance; these companies may have lower overheads given that they have the equipment in stock to track their customer’s car.

You may also wish to call mainstream insurers that don’t feature on comparison websites to ensure that you’re not missing out on a cheaper deal.

Consider taking a pass plus course

Some car insurance policies will provide a discount for drivers that have taken a pass plus course. This course entails the driver being taken through experiences that they previously didn’t cover during their learning to drive; tasks such as motorway driving and additional manoeuvres are included.


You may also be interested in Temporary Car Insurance.

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