A study done by pay-as-you-drive car insurer, By Miles, has found that drivers who average 5,000-6,000 miles a year could be paying around £200 more than those who rack up double that amount of miles over the year.
By Miles analysed 2.5 million car insurance quotes on price comparison website Money Supermarket. The results show that on average motorists who drive between 5,000-6,000 miles a year are being charged £233 more each year than those who say they do up to 12,000 miles.
The ABI (Association of British Insurers) said that while estimated annual mileage is taken into consideration with insurance policy prices, so are many other factors like age of the driver, use of the vehicle and claims history. For example, younger drivers are more likely, statistically speaking, to be involved in accidents so, even with a low annual mileage, would be seen as higher risk, which in turn can mean a higher premium.
Black box insurance, also known as telematics, calculates your premium based on the way you drive. The insurance company will fit a small GPS box in your car which transmits information about things like speed, mileage, steering and braking back to them.
There are both advantages and disadvantages to taking out this type of car insurance. If you’re in a group likely to be penalised with a higher premium, like young drivers, then black box insurance could help lower your premiums. An added bonus is that the GPS device would come in handy for tracking your car if it gets stolen. On the other hand if you use your car often, or for particularly long drives then you may actually end up paying a higher premium with black box insurance than if you went with a normal insurance policy.
