Traditional comprehensive car insurance can be expensive, particularly if you don't do a lot of driving. However, most of us want to have the reassurance that our car is covered for any eventuality, not just for third party damage.
If you don't use your car very much, a Pay as You Drive (or Pay as You Go) may be a cover option that suits. This type of policy offers a more flexible approach to car insurance than comprehensive insurance, as you only pay for the kilometres you usually drive, but you still get the same cover as traditional comprehensive car insurance.
The way it works is that you nominate the number of kilometres that you drive per year and your premium is calculated on that. The less you drive, the more you save!
If you don't drive the full kilometres you nominated for the year, they can be carried over to the next year, provided you're eligible to renew your policy.
If you have used up all your kilometres before the end of the period for which you're insured, you can buy extra kilometres and top up your policy, without affecting your policy.
If you don't top up, you are still covered for Third Party, Fire and Theft for the remainder of the cover period, but not for damage to your vehicle.
What is the Main Benefit of Pay as You Drive?
The big advantage is a significant saving on your premium. Here's why: With traditional comprehensive car insurance, you pay a flat annual premium, which the insurer calculates based on average usage across the community.
If your car usage is low or moderate, it could mean that you're paying for more than you use. There's no flexibility for people who don't do a lot of mileage. But, with Pay as You Drive, your premium is based on the actual number of kilometres you drive in the period of insurance. You're not paying for cover when you're not driving your car.
You are not sacrificing the protection of the 'old' type of car insurance. Pay as You Drive can give you full comprehensive cover provided the premium has been paid on time, and you stay within your nominated kilometres.
Who should Consider Pay as You Drive Car Insurance?
If you don't do a lot of driving, have a good driving record and are aged over the age of 25 years, you could make some great savings by purchasing this type of car insurance.
Compare car insurance quotes online with Choosi today.
These articles are provided as reference material to allow more informed decision making, but are not intended as being a complete source of information on any topic. All readers should make their own independent analysis on the topic to make sure they have considered the aspects that are important to them.