Pay-As-You-Drive Policies: Save 30% on Low-Mileage Cars

What is PAYD Car Insurance?

Pay as you drive (PAYD) car insurance is designed with you in mind, especially if your car isn't clocking in long miles every day. At its core, it’s a usage-based insurance model where your premium depends on how much you actually drive, not just your car’s specs or past driving records. You pick a plan based on your expected annual kilometres, say 5,000 or 10,000 km. If you stay within that limit, you enjoy lower premiums. If you exceed it, no problem—you can top up or switch insurance plans.
For low-mileage drivers, it’s a win-win. You get all the benefits of regular motor insurance, including third-party liability and own damage cover, but without paying for the miles you never drove.

How PAYD Motor Insurance Works?

Think of PAYD insurance like choosing a mobile plan. You select a kilometre package based on how much you expect to drive—something like 5,000 km, 10,000 km, or 15,000 km a year. Once you are on board, your insurer keeps track of your driving, either through periodic odometer photos or a small tracking device installed in your car. Now, what happens if you go over your limit? You don’t get penalised with huge fees. Instead, you can top up your plan by purchasing extra kilometres, kind of like buying more data when you’ve run out of your internet pack.
What’s also great is the flexibility. Whether you need coverage for the whole year or just a few months, PAYD plans can adjust based on how often and how far you drive. So, if your annual driving is somewhere around 8,000 km, choosing a 10,000 km package gives you a nice buffer, lowers your premium, and keeps you covered without breaking the bank. 

Benefits of PAYD Insurance

Pay as you drive (PAYD) car insurance policies come with a host of advantages that go beyond just saving money. If you're someone who drives less than the average commuter, this insurance model is practically designed for you.

1. Lower Premiums: The most obvious perk. Since your premium is based on how much you drive, you are not paying for unused road time. For low-mileage users, this can mean savings of up to 30%.
2. Customisation: You can choose a plan that actually suits your usage. Whether you drive 5,000 or 20,000 kilometres a year, there is a plan tailored to your needs. You get to pick what works for you, not the other way around.
3. Encourages Smarter Driving: Knowing your insurance is linked to usage makes you rethink unnecessary trips. Over time, this can lead to better driving discipline and smarter travel planning.
4. Reduced Carbon Footprint: Driving less also means contributing to a greener planet. 
5. Full Coverage: Despite lower premiums, you still get comprehensive protection for the coverage kilometres. 

Who Should Consider Buying PAYD Insurance?

You should definitely look into PAYD motor insurance if you:

• Work from home or have a hybrid work model
• Own a second car that’s rarely used
• Live in a walkable city or rely mostly on public transport
• Primarily drive on weekends or during vacations
• Are a senior citizen who doesn’t drive often
• Have relocated temporarily but kept your vehicle
• Own a vehicle that is more of a backup option for emergencies

In short, if your car is more of a standby soldier than an everyday warrior, pay as you drive could be your financial ally.

Pointers to Keep in Mind

Before you jump into pay as you drive motor insurance, keep these in mind:

1. Exceeding Limits: Going over your declared mileage may attract extra charges.
2. Accurate Tracking: Choose an insurance provider with transparent and reliable mileage tracking.
3. Coverage Clarity: Double-check what is included in your base plan and what counts as an add-on.
4. Change in Driving Habits: If you start driving on a regular basis, you may want to switch back to a traditional plan.