Get a car quote with Confused.com
- Save up to £285 on your car insurance*.
- Compare over 100 car insurance providers.
- Enjoy Confused.com rewards.
Pay-as-you-go car insurance (PAYG) is a specialised type of policy that’s designed so that you only pay for cover when you’re using your car. Find out how it works and compare your PAYG insurance options.
Once you’ve taken out a PAYG insurance policy, you’ll be covered for any driving you do during the insurance period. You pay a basic set rate each month or year, and then pay a small additional charge for each mile or hour you drive in the insurance period.
Like telematics insurance, pay-as-you-go insurance will generally require you to attach a black box to your vehicle, which tracks how much you drive. However, with PAYG insurance, the black box does not necessarily measure your driving performance but instead records the distance and time you spend driving.
If you’re involved in an accident, or need to claim on your insurance, you’ll need to pay a regular excess amount as you would with a standard insurance policy.
Pay-as-you-go insurance is best suited to those who don’t drive regularly but want ongoing cover for when they do need to drive. As you’re charged based on the time or distance you drive, you won’t be paying for cover you don’t use, but will avoid the hassle of applying for temporary insurance every time you want to drive.
PAYG insurance may be suited to young drivers, especially those at university or who only drive occasionally. You’ll be covered for when you need to drive, such as when you’re borrowing a friend’s car or returning home.
As this type of policy requires a black box, you may also be able to combine it with a telematics insurance policy. Car insurance is generally more expensive for young drivers, but telematics cover can help reduce the cost of your insurance, provided you’re a good driver.
As a learner driver, you may be limited in when, and how much, you drive. While you’ll need car insurance in order to legally drive in the UK, it may not make financial sense to get regular car insurance if you’ll only be driving a handful of times each month.
PAYG insurance gives you ongoing cover but also means you won’t be paying for more extensive cover designed for frequent drivers.
PAYG cover may be worth considering if you’re a part-time delivery driver, or only deliver in your local area. If you drive every day or are responsible for long-haul deliveries, then regular insurance or telematics insurance will likely be more cost effective.
As the name suggests, you’ll pay for insurance based on the number of miles you drive each insurance period. The black box attached to your car will track the distance you drive, and you then pay based on the total miles.
This type of policy is calculated based on the amount of time you use your vehicle. The less time you spend driving, the less you’ll pay for insurance.
Also known as telematics or black box insurance, this type of cover measures how well you drive, with discounted premiums given to those considered to be safer drivers. This is based on a number of factors including your speed, acceleration, braking, as well as the time of day and location you generally drive in.
Also called telematics insurance, black box insurance involves a tracker being attached to your car to measure your driving performance. Along with measuring time and distance travelled, the black box also tracks things like your braking, accelerating and turning to determine how well you drive.
You’ll then receive cheaper insurance if you can demonstrate that you’re a safe driver. This may be especially suited to younger or inexperienced drivers, who often face higher insurance premiums.
If you only drive on certain occasions, such as when hiring or borrowing a car, you can get temporary car insurance to cover you only for the period you drive. This can be anywhere from 1 hour, or up to 28 days.
This may be a better option for those who don’t own a car, as you won’t need to pay an ongoing fee.
There are a number of regular exclusions that apply to black box and PAYG car insurance. These include:
With regular car insurance, you pay a flat premium regardless of how often you actually drive. If you only use your car occasionally or only drive short distances, you may be paying more than you need to for insurance.
Pay-as-you-go insurance only charges you for the time or distance you drive, and this can often result in cheaper premiums, depending on how much you drive.
If you drive every day or often drive long distances, normal car insurance will likely be a cheaper option.
Find out which cars are placed in insurance group 39 and how much it might cost to insure them.
Find out which cars are placed in insurance group 38 and how much it might cost to insure them.
Find out which cars are placed in insurance group 40 and how much it might cost to insure them.
Find out which cars are placed in insurance group 37 and how much it might cost to insure them.
Find out the average cost of insurance for a Citroen C4 based on the driver’s age and location.
Find out which cars are listed in insurance group 32 and how much it costs to insure them.
Find out which cars are placed in insurance group 33 and how much it might cost to insure them by driver age and location.
Find out which cars are placed in insurance group 35 and how much it might cost to insure them.
Find out which cars are placed in insurance group 36 and how much it might cost to insure them based on the driver’s age and location.
Find out which cars are placed in insurance group 34 and how much it might cost to insure them by drivers age and location.
finder.com is an independent comparison platform and information service that aims to provide you with the tools you need to make better decisions. While we are independent, the offers that appear on this site are from companies from which finder.com receives compensation. We may receive compensation from our partners for placement of their products or services. We may also receive compensation if you click on certain links posted on our site. While compensation arrangements may affect the order, position or placement of product information, it doesn't influence our assessment of those products. Please don't interpret the order in which products appear on our Site as any endorsement or recommendation from us. finder.com compares a wide range of products, providers and services but we don't provide information on all available products, providers or services. Please appreciate that there may be other options available to you than the products, providers or services covered by our service.