Pay-as-you-Drive Car Insurance
Motorists can now securely purchase pay as you go car insurance online for the first time. Terrific low rates for those motorists looking for ultimate flexibility and tailored cover from their new motor policy.
You could save up to £518*
*51% of consumers could save £518.14 on their Car Insurance. The saving was calculated by comparing the cheapest price found with the average of the next four cheapest prices quoted by insurance providers on Seopa Ltd’s insurance comparison website. This is based on representative cost savings from June 2025 data. The savings you could achieve are dependent on your individual circumstances and how you selected your current insurance supplier.
Click through on the ‘Get a Quote’ button above to compare pay as you drive insurance quotes from over 130 of the leading UK motor insurers, and obtain the most suitable fully featured cover and protection you require. The Quotezone click and compare service is entirely free to use. It is a totally independent and impartial insurance comparison site, already helping over 1 million drivers across the UK to get the best deal.
Top 6 FAQs for Pay as You Drive Car Insurance
What is Pay-As-You-Drive (PAYD) car insurance?
Pay-As-You-Drive insurance is a form of car cover where you pay based on how much you actually drive, usually calculated per mile or per month, rather than a fixed annual premium. You typically pay a base “parked” fee plus a mileage charge.
How does it work in practice?
Most PAYD policies use a tracking device or telematics system installed in your car (or sometimes a smartphone app). This records your mileage — and sometimes driving behaviour — so your insurer can calculate your premium based on actual usage rather than an estimate.
Who is Pay-As-You-Drive insurance best suited for?
It’s generally most cost-effective if you:
Drive low annual mileage (e.g., under ~6,000–7,000 miles)
Use the car only occasionally (e.g., weekends, errands)
Want flexible cover and don’t commute long distances daily
Drivers with high mileage or frequent long trips may end up paying more than with traditional annual cover.
Will PAYD actually save me money?
Yes — but it depends:
Potential savings come from paying only for miles you drive, rather than an insurer guessing your annual mileage up front. For some low-mileage drivers, this can work out cheaper. However, if your mileage increases significantly, PAYD can become more expensive than standard policies. Always compare quotes and estimate your likely mileage before choosing.
Does it monitor how I drive too?
It depends on the policy:
Some PAYD products only charge for mileage, not driving style. Others combine mileage with driving behaviour data (speed, time of day) — similar to “black box” or “pay how you drive” insurance — and may adjust prices or rewards based on safe driving. Always read the terms to see what data is collected and how it affects your premium.
Are there any downsides or limitations?
Yes — potential drawbacks include:
Can be costly if you drive a lot (especially daily commuting or long trips).
Some policies have age limits or restrict certain car types.
You may be uncomfortable with a device tracking mileage or driving data — check privacy terms.
Plus, as with any insurance product, extras and cover levels vary between providers — so always check what’s included.
Bonus FAQ: How does PAYD compare to black box telematics insurance?
PAYD focuses mainly on charging per mile driven, while telematics (“black box”) insurance can also adjust premiums based on how you drive (speeding, braking, time of day). Some PAYD policies mix features of both, so check what yours tracks and how it affects pricing.
The EU is introducing a new regulation that will come into effect from 2015. If you buy a new car from 2015 onwards you can expect it to have black box technology on board as a matter of course. This box will monitor your driving and essentially ‘report back’ to the insurer. If you drive well you may be rewarded with lower premiums. You can guess what will happen if you are a considered to be a poor driver.
A Pay As You Go monthly policy allows you to purchase cover as and when you need it. Payment of your premium is done on a monthly basis. It is remarkably flexible meaning you can purchase your motor cover one month at a time and then turn it off when not required.
Policyholders are sent a renewal notice shortly before the expiry of the policy. If the policy is required for a further month then it could be renewed automatically and collect the monthly premiums from your bank account.
To cancel your new pay as you drive car insurance cover you will need to go online and cancel the policy in the ‘Your Account’ section on or before the designated expiry date. Policy features include:
• Cover up to 4 different drivers at low rates
• Earn 1 years No Claims Discount for only 8 months claim free cover
• Maximum no claims bonus guaranteed for life
• Monthly rate quoted is guaranteed for 8 months providing there are no changes in circumstances.
Pay Per Mile Car Insurance UK
Pay Per Mile car insurance is an increasingly popular option in the UK, designed for drivers who use their vehicles less frequently. Unlike traditional car insurance, which charges a fixed annual premium regardless of usage, Pay Per Mile insurance bases part of the cost on how far you actually drive. This flexible pricing model can make car insurance more affordable and fairer for low-mileage motorists.
Pay Per Hour Car Insurance UK
Pay-per-hour car insurance in the UK allows drivers to pay only for the hours they actually use their vehicle. Using telematics or a smartphone app, coverage activates when driving and pauses when parked. It’s ideal for occasional drivers, urban commuters, or second-car owners, offering flexibility, potential cost savings, and real-time usage-based insurance.
