It’s been revealed that motorists can save more than £160 a year by taking out a little-known car insurance policy.
Almost one in five motorists (17%) who drive less than 4,000 miles per year could save up to £168 on average by swapping to a pay-by-mile policy instead of annual comprehensive car insurance cover.
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The policies are designed to be a fairer option for low mileage drivers because these motorists use their cars less often, and so are less likely to have an accident or make a claim.
Research from experts at Compare the Market has found that the proportion of drivers switching to pay-by-mile provider, By Miles, has risen by 125% since 2020.
By Miles analysis of the latest MOT data found the average annual mileage for UK drivers dropped by more than 1,000 miles to just 5,398 in 2021 – which is a 24% drop compared to pre-pandemic levels.
More than seven in ten motorists (74%) now drive less than 7,000 miles per year, according to By Miles’ analysis.
The fewer miles motorists drive, the more likely they are to save by switching to a pay-by-mile policy.
Julie Daniels, motor insurance expert at Compare the Market, said:
“Flexible working, environmental concerns, and the increasing cost of driving mean many motorists are typically driving fewer miles each year.
“It’s important to fully understand how many miles you drive annually, but for motorists who are reducing their mileage, taking out a pay-by-mile policy could be an effective way for you to save money.”
James Blackham, CEO at By Miles, commented:
“We’re now a nation of low mileage drivers, yet many motorists still don’t realise that they could be saving money on their insurance costs to reflect this.
“Pay-by-mile insurance means that the less you drive, the more you save – so if your car is parked up then so are your premiums. At a time when the cost of driving is through the roof, it might make sense to switch to pay-by-mile if you are a low mileage driver.”
