Pay-Per-Mile Car Insurance
Motorists can now securely purchase pay per mile 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 per mile 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.
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.
Typically, Pay Per Mile insurance consists of two elements: a fixed base cost and a variable per-mile charge. The base cost covers essential insurance protection when the car is parked or not in use, while the per-mile rate applies only when the vehicle is driven. Mileage is recorded through telematics technology, such as a small plug-in device, a smartphone app, or built-in vehicle connectivity. These systems primarily track distance rather than driving routes, helping address common privacy concerns.
Top 8 FAQs for Pay Per Mile Car Insurance UK
1. What is Pay Per Mile car insurance?
Pay Per Mile car insurance (also called usage-based insurance) is a policy where you pay a base monthly fee plus a cost for each mile you drive. It’s ideal for drivers who don’t use their car often, such as remote workers, city drivers, or those with a second vehicle.
2. How does Pay Per Mile insurance work?
You pay: A fixed monthly base rate (covers insurance when the car is parked); A per-mile charge for the distance you actually drive; Mileage is tracked using a telematics device, mobile app, or vehicle data system.
3. Is Pay Per Mile insurance legal in the UK?
Yes. Pay Per Mile insurance is fully legal and FCA-regulated in the UK, just like traditional comprehensive, third-party, or third-party fire and theft policies.
4. Who is Pay Per Mile insurance best for?
It’s best for drivers who: Drive less than 6,000–8,000 miles per year; Work from home or commute occasionally; Live in cities with public transport; Own a second or weekend car; Are retirees or students who drive infrequently.
5. How is my mileage tracked?
Mileage is usually tracked via: A plug-in telematics device; A smartphone app; Built-in vehicle connectivity; These systems record distance driven, not where you go, depending on the provider.
6. Is Pay Per Mile insurance cheaper than standard insurance?
It can be significantly cheaper if you’re a low-mileage driver. However, if you drive a lot, traditional fixed-price insurance may work out better. Savings depend on:
Annual mileage
Per-mile rate
Base monthly cost
7. Does Pay Per Mile insurance affect my no-claims bonus?
No. You earn and keep your No Claims Discount (NCD) the same way as with traditional car insurance, as long as you don’t make a claim.
8. Can I switch back to a standard insurance policy?
Yes. Most insurers allow you to switch policies at renewal or sometimes mid-term (subject to fees). Pay Per Mile insurance does not lock you in permanently.
This type of insurance is particularly well suited to drivers who travel fewer miles each year. People who work from home, rely on public transport, or only use their car occasionally often find Pay Per Mile policies more cost-effective than standard insurance. It is also a practical solution for households with a second car, students who drive infrequently, or retirees who no longer commute daily. For drivers covering limited annual mileage, the savings can be substantial compared to a traditional fixed-price policy.
In addition to potential cost savings, Pay Per Mile insurance can encourage more mindful driving habits. By making the cost of each journey more visible, some drivers become more conscious about unnecessary trips, which may help reduce congestion and environmental impact. For urban areas in particular, this usage-based approach aligns well with wider sustainability goals.
Pay Per Mile car insurance in the UK is fully regulated and offers the same levels of cover as standard policies, including comprehensive and third-party options. Drivers still earn no-claims discounts in the usual way, and the policy can typically be reviewed or changed at renewal. As driving patterns continue to evolve, Pay Per Mile insurance provides a flexible alternative that reflects how modern motorists actually use their cars.
