New research shows that low mileage drivers are getting poor value for money from their car insurance.
UK pay-by-mile car insurance provider By Miles’ analysis of nearly 2.5 million car insurance quotes on comparison site MoneySuperMarket reveals that low mileage drivers (motorists who say they drive less than the national average) may actually be paying more for their car insurance than higher mileage drivers.
Department of Transport MOT data shows the average annual mileage of a car in the UK is 7,134, meaning up to 19 million motorists are in danger of being over-charged for their car insurance as they qualify as ‘low mileage’ drivers.
This runs contrary to the belief of many people that the more you drive, the more you pay for your car insurance. According to the data, motorists who tell insurers they’ll drive up to 6,000 miles in a year pay an average of £233 more than those who say they’ll drive up to 12,000 miles.
Drivers penalised across the board
25 to 29-year-olds estimating 5,000 miles a year are paying £229 more than those driving 11,000-12,000 miles.
And even the most experienced drivers are also getting over-charged, with 50 to 64-year-olds driving 5,000 miles a year paying £100 more than those driving 11,000-12,000 miles.
Even those who have proved they are the safest drivers on the road, by building up between six to eight years of no claims discount while driving 5,000-6,000 miles a year, are still charged £100 more than those driving 10,000-11,000 miles a year.
According to James Blackham, co-founder of By Miles, motorists are paying too much because traditional car insurance policies don’t accurately reflect the number of miles driven. “Those who don’t drive as much are being treated unfairly. They’re being charged more to subsidise the insurance of higher mileage drivers.
“The current state of play presents motorists with a catch 22 situation – either tell the truth about how much you’re driving and pay over the odds, or lie to get the cost down but risk having your insurance invalidated when you need to make a claim.
“This needs to change. If you don’t use your car much, it doesn’t make sense to charge you the same as a longer distance driver as the odds of you having an accident are significantly lower. Pay-by-mile insurance means that people who drive less are rewarded, and rightfully pay less.”
By Miles launched the UK’s only real time pay-by-mile car insurance policy in 2018, and this is now available through MoneySuperMarket’s car insurance comparison panel.
Tom Flack, Editor-in-Chief at MoneySuperMarket commented, “It’s in our DNA to help drivers find the best deal on their car insurance, so it was a no-brainer to offer pay-by-mile insurance. We wanted to put the brakes on overcharging low-mileage drivers. If you drive less, you should pay less.
“It’s always been important to shop around to make sure you’re getting the best deal for your car insurance. That now includes looking at new technologies that offer drivers increasingly flexible ways of insuring their cars.”
Lucy Rawlings, 26, from Newbury, a By Miles customer since December 2018, commented, “I think most people would assume that the lower the annual mileage, the less the insurance cost. Lowering my annual mileage was definitely something which I considered when renewing my policy to see if it would make a difference to the price as I only use my car in the evening and weekends now.”
“I think that it is more logical that the more you drive, the more you should pay. For someone like me who is the sole driver of my vehicle and uses the train five out of seven days to commute to work, it is unfair to be charged more for driving less.”
“My previous provider, Zurich, quoted me £612 for renewing with them but given the extra cost of my annual season ticket, there was no way I was willing to spend that much when I wouldn’t be using my car as regularly. This was when I found out about By Miles from a family member and thought the pay-by-mile would be the way forward. With By Miles, I will have saved £228, assuming I fulfil the 6,000 miles estimated. If I don’t, the saving could be even more impressive!”
Are you paying too much for your car insurance?
James Blackham, co-founder of By Miles advises, “Department of Transport figures show us that the average UK driver is only racking up 7,134 miles a year. This means that around 19 million low mileage drivers are being charged more for driving less. This isn’t fair.
To work out if you’re one of them, take a look at your annual MOT certificate. This will show you how many miles you drove last year and help you make an educated estimate for the coming year. You could also look at your car’s service record, or just stick your reg plate into the quick quote on the By Miles website and we’ll check the DVLA database for you!
If you’ve driven below 7,000 miles a year you might be able to save by opting for pay-as-you-drive car insurance. It’s best to get a few quotes to compare prices and the level of coverage you’re getting. But whatever you do, don’t fudge the numbers – being caught out driving significantly more or less than you tell your traditional car insurer could invalidate your cover.”