What is mileage based car insurance?
Put simply, mileage based car insurance is based on how much you drive your car. It’s not for everyone – if you spend a lot of time on the road it might not be the best option because it could end up costing more than a traditional policy.
Mileage based car insurance works on the principle that the less you drive, the less likely you are to make a claim. Your insurance provider will monitor how many miles you drive to get an accurate picture of your driving, which allows for your premiums to be adjusted accordingly. The average UK car insurance cost £460 in 2020, so for those who use their car infrequently, or young drivers who struggle to afford premiums on standard policies, this could really reduce the cost of your insurance.
What alternatives to mileage based insurance are available?
Of course, there’s the option to choose a standard insurance policy. However, if your car isn’t being driven regularly, this might mean you end up paying more than necessary. There are other options that are similar to mileage based car insurance, including:
• Pay-per-hour insurance: This has a similar structure but premiums are based on the amount of time you spend on the road instead of the mileage you cover.
• Telematics insurance: This involves having a telematics box installed in your car or using an app. This allows your insurer to monitor how well you drive, including habits like acceleration, braking, and time spent driving.
Why choose mileage based car insurance?
The biggest benefit of mileage based insurance comes from the potential savings. If you use your car infrequently or only travel short distances, this type of car insurance might suit you.
If you’re being priced out of standard car insurance policies, mileage based insurance could get you the right cover at a lower cost. However, if you’re looking at this type of insurance for cost reasons, it’s important to think realistically about how much mileage you do.
How much does mileage based insurance cost?
Mileage based insurance usually charges two rates:
• When your vehicle is stationary
• For each mile driven
Exact costs will vary as they would with any other type of car insurance. Generally, you can also add extras onto a mileage based insurance policy, such as:
• Breakdown cover
• Multi-car cover
• Additional driver insurance
These add-ons will also affect your premiums. To check how much mileage based insurance could cost you, compare the options now with Insuro