Driver warning: Motorists could save £140 on car insurance with proposed car tax method
Almost a fifth of motorists who drive less than 5,000 miles a year could save £123 on average by switching to a pay-per-mile policy. According to new research, usage-based car insurance could save the growing number of low-mileage drivers an average of £141 a year, which could help offset the rising cost of living.
The average cost of a pay-per-mile policy is £585, but drops to £430 for motorists who drive less than 5,000 miles a year.
For those driving less than 2,000 miles a year, the average cost drops to £306.
The data, from comparethemarket.comrevealed that nearly half of motorists are taking fewer trips and 31% are using less fuel to mitigate rising driving costs.
Many motorists are now looking to cut costs as one in three drivers fear they won’t be able to cover driving costs in the coming weeks.
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“Pay-per-kilometre policies can also benefit motorists who don’t know how often they will use their car, as any payments will be based on miles driven each month, rather than their expected annual mileage.
“Drivers can ensure they have the right insurance policy for their needs by shopping around when renewing their policy.
“With comparethemarket.com, customers can also set up automated car insurance renewal quotes and get notified ahead of their renewal date to help them find great deals and save money.”
Kilometer driving has been touted as a potential replacement for the current charging system in the UK.
More than eight out of 10 confirmed that it was precisely the pay-as-you-go aspect that prompted them to reduce the number of kilometers they drove.
James Blackham, CEO of By Miles, said: “The cost of living crisis is showing its teeth for drivers – with fuel, repairs and the price of cars on the rise – so it was unfortunately not surprising to learn that a lot of us have to make changes.
“The drop in mileage is nothing new, as a nation we’ve been driving less every year for over a decade – but premiums for traditional insurance policies haven’t kept up with this trend.
“Per-mile insurance means the less you drive, the more you save – so if your car is parked, so are your premiums.
“At a time when the cost of driving is at an all-time high, it might be a good idea to switch to pay-per-mile if you’re a low-mileage driver.”