YOU could save over £230 a year by switching to a pay-as-you-go car insurance.
Drivers who fit into the low mileage category could actually be paying more than they have to for cover, despite using their car less.
A study from insurance company By Miles revealed drivers who declared between 5,000 and 6,000 miles a year were charged £233 more than those driving 11,000 miles.
The investigation analysed more than 2.5million car insurance quotes on comparison site MoneySuperMarket between July and September last year.
Drivers who travelled 5,000 to 6,000 miles each year spent an average £809 on their car insurance, according to the study.
But motorists covering between 11,000 and 12,000 miles only forked out around £576 for their cover.
How pay-per-mile policies work
The pay as you go model means you’re only charged for when you’re using the car.
Your vehicle will be covered with a basic policy while it’s parked up and you’ll be charged for this via your upfront annual fee.
When you take the car on a journey, the black box fitted to the on-board diagnostic port on your car will log the journey distance with a fee charged per mile.
Each journey will be calculated and you’ll get a monthly statement telling you how much you need to pay for insurance – if you’re a low mileage driver it’s likely to be much less than a normal policy.
Cover with By Miles will be fully comprehensive and you’ll still be able to collect a no claims bonus – and every policy comes with No Claims Discount protection as standard.
Just like mobile phones, you’ll be able to track your cover via a smartphone app to see journeys and unlock other features
Motorists who travel the average distance of 7,134 miles per year, will also overpay by £169, according to Department for Transport figures.
One driver saved around £280 by switching to a pay-as-you-go (or pay-per-mile) policy.
According to iNews, Jonathan Haselden drives around 3,000 miles a year, and was quoted £680 for his BMW 116 I Sport, despite having 18 years of no claims discount.
With By Miles, he pays £241.89 as a fixed annual cost, then just 5.3p for every mile he covers – or £159 over 3,000 miles.
Pay-per-mile cover uses a black box to track your journey, and charges you according to the actual miles you have travelled.
Customers only have to pay an upfront fee to cover fire and theft while the car is stationary.
And then each trip is logged with drivers charged via a monthly statement at the end of each month.
your guide to car insurance
James Blackham, co-founder of By Miles, said: “Those who don’t drive as much are being treated unfairly. They’re being charged more to subsidise the insurance of higher mileage drivers.
“The current state of play presents motorists with a catch 22 situation – either tell the truth about how much you’re driving and pay over the odds, or lie to get the cost down but risk having your insurance invalidated when you need to make a claim.
“This needs to change. If you don’t use your car much, it doesn’t make sense to charge you the same as a longer distance driver as the odds of you having an accident are significantly lower.
“Pay-by-mile insurance means that people who drive less are rewarded, and rightfully pay less.”