Pay-as-you-go car insurance could be cheaper than an annual deal

Motorists could save money by choosing a pay-as-you-go car insurance policy, rather than an annual deal, according to one expert.

The RAC Foundation says such schemes would allow occasional drivers to pay less throughout the year and that such a system could improve road safety by deterring younger motorists from being on the roads so much.

The foundation proposed the scheme after other motoring groups put forward the idea of a graduated driver licence, whereby newly-qualified motorists would not be allowed on the road at night when they first gained the right to drive.

Elizabeth Box, head of research at the RAC Foundation, said: “In theory graduated driver licensing, which can restrict the number of passengers in a car and the time of travel, can reduce collisions, so it is certainly worth looking at. But there remains a question about how enforceable graduated licensing would be, especially given that the police service is already stretched.”

She added that an alternative might be to promote pay-as-you-go insurance for this group, which would offer a real incentive not to travel at the most risky times of day.

Related Articles