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Pay as you go car insurance

Compare pay as you go car insurance

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What is pay as you go car insurance?

Pay as you go car insurance is a type of car insurance that charges you based on the number of miles you drive.

You pay a flat base rate for your cover, which is often cheaper than what you might pay for a standard car insurance policy. You then pay extra on top for each mile you drive.

It could be a cheaper option for people who only drive occasionally.

We currently compare quotes from 4 pay-as-you-go insurance providers. When you get a quote, we’ll show you these alongside quotes for up to 140 standard car insurance policies from our normal panel of providers.

Look out for the black banner that reads ‘pay per mile policy’. These are the pay-as-you-go-policies we compare.

How does pay as you go car insurance work?

If you get pay-as-you-go car insurance, you're charged a base rate for your cover. You can pay for your policy either annually or monthly.

You're then given some sort of monitoring device to use in your car. This could be something similar to the devices used in black box insurance policies, or it could just be an app you download to your phone.

Your telematics device then tracks the number of miles you drive each month, and you're billed at a pre-agreed rate for each one.

It’s not the same as true black box insurance policies, as these monitor the way you drive, as well as how far you go. Pay as you go policies only look at the distance you’ve travelled.

You won't normally be given a curfew either.

Is pay as you go car insurance cheaper than standard car insurance?

It can be. If you only drive occasionally, pay as you go insurance could be a good way to keep your insurance costs down.

But if you find yourself regularly racking up the miles each month, standard car insurance might work out more cost effective.

And there are other ways to get cheaper car insurance too, so it’s worth considering these before buying a pay as you go policy.

Compare cheap pay as you go car insurance quotes

Who is pay-as-you-go insurance good for?

While it’s not for everyone, there are a few types of driver that could benefit from pay as you go insurance:

  • Infrequent drivers who only drive from time to time could save with a pay as you go policy, as their lower mileage should equal lower insurance costs.
  • Older drivers who find themselves venturing out less but who want a car on hand if they need it could benefit too.
  • Remote workers who no longer commute could potentially save too, especially if they drive infrequently outside of work.
  • New drivers could also benefit. Just like black box policies, pay as you go insurance can be a handy way for less experienced, younger drivers to keep their costs down - as long as they keep their mileage low.
  • Convicted drivers might opt for pay as you go insurance too, as it can often work out cheaper than standard car insurance, especially if they’re low mileage drivers.

Will I have to have a black box installed?

Your insurer needs a way to track your monthly mileage if you’re on a pay as you go insurance policy.

To do this, they either:

  • Install a black box in your car
  • Send you a black box by post that you have to install yourself
  • Send you a link to an app that you download to your mobile

In each case, you should be told exactly how your tracking device works, what data it collects and who it’s shared with.

In most cases, your tracker should only monitor your mileage on a pay as you go policy.

What are the pros and cons of pay-as-you-go insurance?

As with all insurance policies, there are pros and cons to pay as you go car insurance. So it's worth weighing threse up before you get a quote.

The pros of pay as you go car insurance are:

  • You only pay for the miles you drive so if you drive infrequently, you could save
  • It might be cheaper for riskier drivers so younger drivers or those with convictions could save with pay as you go policies, as long as they keep their mileage low
  • You have a car on hand for emergencies so if you don't drive much, but want car that’s insured and ready to go in an emergency, pay as you go insurance might be for you

 

 

The cons of pay as you go car insurance include:

  • High mileage drivers might pay more and could end up paying more than on a standard car insurance policy.
  • You're still tied in for a year so life changes that require you to drive further than you used to could see you paying over the odds for your car insurance.
  • Your costs are less predictable as you’re paying based on the number of miles you drive, your insurance costs are likely to change month to month.

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What level of cover can I get on pay as you go insurance?

Some providers only offer comprehensive cover on their pay as you go insurance. But others let you choose the level of cover you want depending on what you need:

  • Third-party offers the minimum amount of cover legally required. It only covers damage caused to other people’s property or vehicles because of your driving.
  • Third-party, fire and theft covers against damage to your own car caused by fire or theft. It also covers other people’s properties or vehicles against damage caused by your driving.
  • Comprehensive car insurance offers the most cover and can sometimes work out the cheapest of the three types.

Can I add optional extras to my pay as you go policy?

Yes, you can add extras to your policy. Each insurance provider will offer different types of optional extras, or add-ons, but most insurers generally offer:

  • Courtesy car cover to keep you on the road while yours is being repaired following a claim.
  • Breakdown cover gets you back on the road fast if your car breaks down.
  • Windscreen cover for damage to your windscreen, side or rear windows.
  • Motor legal protection to help you recover certain uninsured losses for an accident that wasn’t your fault. For example, medical expenses for personal injury or loss of earnings following an accident.
  • Personal accident cover offers additional cover for an injury and/or death caused by an accident.

What our car insurance expert says

If you don't drive lots of miles or are a young driver looking to build up some experience, pay as you go can be a good option. 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.   
Alex Kindred signature

Alex Kindred

Car insurance expert

Need more help?

Is pay as you go insurance the same as temporary car insurance?

No. They're different things.

Temporary car insurance provides you with short-term cover but charges you a flat rate, in the same way traditional car insurance policies do.

The way it differs from standard policies is the length of time it runs for.

Pay-as-you-go insurance policies are annual and charge you based on how far you you drive rather than purely on a flat rate.

The way it differs from standard policies is how the policy costs are calculated, not the length of time the cover is in force.

Will I have a curfew with my pay as you go policy?

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, where everything from how you drive, to when you drive and how far you go are monitored.

Pay as you go policies only track the number of miles you travel – meaning, in most cases, that the time of day you drive is irrelevant.

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