Could you save £300 a year switching to PAYG car insurance?
An estimated 821,000 car owners in the UK drive for just an hour or less each week. Given the annual car insurance policy is £847 a year, these infrequent drivers pay £16 an hour to be on the road.
However, by switching to a pay-as-you-go car insurance policy, motorists could save up to £300 a year, according to Cuvva, the UK’s first app-based PAYG car insurer.
It claims low-mileage drivers could bring the cost of cover down to around £570 This should help offset some of the 11% rise in insurance as a result of regularity changes, which has hit young drivers the hardest. The cost of running a car eats up as much as 20% of a young driver’s annual take-home pay.
As a result, UK drivers could save a combined £227m annually. Those in London are most likely to benefit from reviewing their insurance; they use their cars less frequently than anywhere else in the UK.
Cuvva’s research found that 7% of London’s 1.9 million households with a car, equating to 138,000 drivers, use their vehicle for just one hour a week or less. Those living in the North West, North East and Wales are likely to use their car more frequently.
Freddy Macnamara, founder and CEO of Cuvva, said: “A lot of drivers only need their car once in a blue moon, yet they often end up paying the same price for their insurance policy as someone who is constantly on the road. This is clearly an unfair situation and the insurance industry needs to start promoting a more flexible approach, encouraging drivers to seek out cost-effective insurance policies which suit their needs.
“At a time when high inflation and low wage growth are putting a real squeeze on household budgets, the potential to shave hundreds of pounds a year off car insurance through switching from an annual policy to pay-as-you go could be the difference between affording a holiday or not.”