A SINGLE mum from Slough has revealed how she slashed car insurance bill by almost £550 a year with a “drive as you go” policy.
Masika, 26, was quoted an annual policy for £917 but it was “too much” on top of her other bills, reports the Mirror.
She’d taken on a new job which meant she’d no longer be driving the 120 miles a week to the office and would only use her car for around 10 miles a week taking her son to nursery, shopping or to see friends and family.
Her train fare costs £3,500 a year and she couldn’t afford the almost £1,000 a year bill she was quoted for car insurance as well.
“I work full time and I pay almost £800 for childcare on top of household bills of around £1,200 before food or even considering any social outings for my child and I,” Masika said.
At first, she considered selling her car but instead ended up looking into a “drive as you go” policy.
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.
Pay-per-mile car insurance is offered by many firms such as Buy Miles, Coverbox and InsureTheBox, and can work out cheaper than a traditional policy.
This is because drivers only pay for the miles that they drive on top of a basic amount to cover the car while it’s parked.
Unlike a traditional policy where you pay for the year upfront, drivers pay their insurance bill a month in arrears. It’s also likely to change every month depending on how far you’ve driven.
Masika paid a flat rate with Buy Miles of £269.82 to make sure her car was covered for the year when she wasn’t driving it. After that, she pays 6.9p a mile.
Her first bill came to just £8.24 for the moth after using her car to travel 121 miles.
How to save on car insurance
CAUGHT driving without insurance will see you slapped with a huge fine – but it doesn't come cheap either. Here are some tips you can follow to get you the best ideal on your insurance:
- Buy 21 days in advance – Purchasing a policy three weeks in advance can cut your bill in half. Buy 30 days in advance it could cost you hundred because there aren’t as many policies out there. Taking out a policy too late and insurers will deem you a higher risk and whack up your premium.
- Never accept a renewal quote – Your policy could double overnight if you’re not careful. Make sure you put a reminder in your phone of when it’s up and shop around for a better deal.
- Check more than one comparison site – These sites offer different deals so it’s best to look at more than one site at the 21 day mark to see what they can offer.
- Check Direct Line and Aiva separately – Two of the biggest companies aren’t on comparison sites so you’ll need to check them too to see if they can offer you a better deal.
- Don’t wait for a renewal – If you find a better deal elsewhere, you can cancel your existing policy and get a refund for the rest of the year. There will be a fee though – usually £50 – so take that into consideration when you look at how much you can save.
If Masika drove the same amount of miles every month, she could expect to pay £368.70 a year – including the flat rate – saving her £548.30.
Motorists will need to have a black box tracker fixed to their car under the dashboard to record how many miles are driven before a bill is sent to you at the end of the month.
You’re also able to keep track of how much your bills are likely to cost via the app.
But flexible car insurance policies aren’t for everyone – the upfront annual fees and cost-per-mile charges will vary depending on a number of factors such as age, no-claims bonus status, the type of car and it’s overnight location.
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You could actually save even more cash with hourly insurance rates from firms like Cuvva, but these aren’t always the cheapest option if you are using your car regularly or for long periods.
And if you regularly use your car for long distance journeys then you could end up forking out more than a normal car policy.
Driving without insurance is illegal on the UK roads no matter what your circumstances but it’s important that you get the right cover for you.
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