Pay-Per-Mile Insurance

Pay-per-mile insurance or pay-as-you-drive (PAYD) is based on usage, that is to say, it only accounts for the miles you drive.

While it will depend largely on your insurance company, your driving habits may be tracked by GPS or regular odometer readings. Other devices will allow the insurer to record your speed, distance, and breaking habits. Each of these systems has its own drawbacks and merits. GPS can't track driving habits while habit monitoring systems can't track where you drive.

Pay-per-mile insurance is a good bet for people who don't drive very often but bear in mind that your rates could increase depending on how and where you drive. You may also need to pay your insurer for a monitoring device or service.