You pay a base rate for your cover, which you can pay either annually or monthly. This base rate is usually cheaper than what you’d pay for standard car insurance.
You're then given a monitoring device that's either fitted to your car or an app you download to your phone. It tracks the number of miles you drive each month, and you're billed at a pre-agreed rate for each one. So it can work out cheaper for occasional drivers.
It’s not the same as a telematics policy, which monitors how you drive as well as your mileage. Pay-as-you-go or pay-per-mile car insurance policies only look at the distance you travel.
Some providers only offer comprehensive cover on their pay-as-you-go insurance policies. But others let you choose the level of cover you want depending on what you need:
Third-party
Third-party, fire and theft
Comprehensive
***Confused.com Q2 2023 price index data
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"By only paying for the miles you drive, your insurer gets a more accurate idea of your driving. It can be a great way to save money if you're just starting out or if you're an older driver who doesn't use the car much.
If you're worried about keeping track of your mileage, most pay as you go policies will make it easy for you to keep track of your driving and even top-up with extra miles if you need to."
is a legal requirement if you're driving in the UK. Find out more about choosing the right cover at the right price.
lets you prove you’re a safe driver, and save money on your policy, even if you’re inexperienced or seen as high risk.
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Yes. Most pay per mile policies are rolling subscriptions, so you can usually cancel them fairly easily if your circumstances change. Just be aware that you may have to give notice to do so.
Once you’ve cancelled, you’ll then be able to take out a traditional car insurance policy - which might end up cheaper if you’re driving a lot of miles.
This depends on the provider, so it’s worth checking with your insurer to see how they can help.
You’ll need more than just car insurance to work as a food delivery driver too. You’ll usually need business car insurance, alongside some courier-specific policy extras like courier insurance and goods in transit insurance. You might even need public liability insurance. Check with your employer to see exactly what you need in place.
It’s unlikely that you have a curfew on a pay-as-you-go car insurance policy. Curfews are typically only imposed on black box policies, which monitor how, when and how far you drive.
Pay as you go policies only track the number of miles you travel. So in most cases, the time of day you drive is irrelevant.
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Page last reviewed: 06 June 2023
Reviewed by: Louise Thomas
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