A single mum has revealed how she slashed her car insurance costs to just a couple of pounds a month by moving to a ‘pay as you drive’ insurer.
Masika 26, from Slough, decided to review her car insurance after accepting a new job. It meant instead of driving 120 miles a week to work, she’d be commuting on the train, equating to a weekly mileage of just 10 miles.
“I work full time and I pay almost £800 for childcare on top of household bills of around £1,200 before food or even considering any social outings for my child and I,” Masika said.
“With the price of an annual train season ticket £3,500 and a renewal quote from my car insurance provider at the time £917, it was too much.”
Masika said that the change in circumstances meant she’d only need the car for driving her son to nursery, shopping or visiting friends or family – and admits she was tempted to sell up.
Instead however, she looked into the option of a pay-by-mile car insurance policy, where she would only have to pay for the miles she drives.
Using a price comparison site, she found out about the insurer By Miles, which provided her with an estimated annual quote which worked out nearly £600 cheaper than by using a traditional car insurance policy.
“I thought it was too good to be true, so I did some reading around to be safe and found out By Miles was regulated by the FCA. Then after an initial conversation with the By Miles team over live chat, and a phone call, I decided to go for it and get a pay-by-mile policy,” she added.
With By Miles, motorists are sent a tracker gadget to plug into their car under the dashboard. This then monitors how many miles you travel, so that the insurer can work out what to charge you.
Masika said the process of setting up and plugging in the tracker was “really easy”, while getting set up with the firm’s app – which lets you keep track of the miles travelled and your running bill – was also very simple.
Low mileage motorists pay more for their cover
Research from By Miles last year suggested that drivers who don’t put in many miles behind the wheel pay far more for their cover than those who are out and about on a regular basis.
The insurer analysed car insurance quotes on MoneySuperMarket and found that drivers who put in around 5,000-6,000 miles a year were charged an average of £233 a year more than those who were clocking up between 11,000 and 12,000 miles per year.
Making the most of monthly statements
With a traditional car insurance policy, you are told upfront about how much your cover will cost over a 12-month period. You’ll then have to pay the full amount up front – if you opt to pay in stages you’ll be charged interest as you’re essentially borrowing from a third party.
Things work a little differently with pay-by-mile insurers, as you get a monthly statement outlining your journeys over that month and how much you need to pay.
Masika said that this was a big selling point, with her first full month statement coming to £8.24 for 121 miles.
“I was showing it off like I’d been given an award. I think that is the first bill I have been happy to pay.”
Masika says that this form of insurance has provided her with far more flexibility that you can expect from a car insurance policy, including allowing her to step in to help her family.
“At the end of last month my father had some car trouble and was without a car for four days or so. Just to hire a car for those days was so expensive so I offered to put him on my insurance so that could drive it.
“It cost me 0.1p extra on my per-mile rate and for the miles he did, it came up to £40. If I’d hired a car or if I’d had mainstream insurance, he would have had to pay a lot more.”