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We compare car insurance from 169 providers1

We do the hard work for you, comparing deals from the biggest providers in the UK so you can get the right cover.

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1Accurate as of February 2024.

What is pay-as-you-go car insurance?

Pay-as-you-go car insurance is a type of car insurance that charges you based on how much you drive. This can be a good option for drivers who don't drive very often, such as students, retirees, or people who live in cities with good public transportation. There are two main types of pay-as-you-go car insurance:

  • Pay-per-mile insurance

  • Usage-based insurance

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How does pay-as-you-go car insurance work?

Pay-as-you-go car insurance works by charging you based on how much you drive.

Pay-per-mile insurance charges you a base rate per month, plus a certain amount per mile that you drive. The more miles you drive, the higher your premium will be.

Usage-based insurance uses a black box or telematics device to track your driving habits, such as how often you brake hard, accelerate quickly, and drive at night. You may be rewarded with lower premiums if you drive safely.

What levels of cover can I get with pay-as-you-go insurance?

When you take out pay-as-you-go car insurance, you may find providers offer fully comprehensive cover as standard. However, if you are given a choice, you’ll normally have the same standard levels of cover to pick from:

  • Third-party

    Third-party car insurance is the minimum legal level of cover you can get if you own and drive a vehicle. It insures you for any damage you do to another person (the third party), their vehicle or their property 

  • Third-party, fire and theft

    Third-party, fire and theft is the next step up, and as well as third-party cover you’ll also be able to claim for damage done to your own car as a result of a fire or theft 

  • Fully comprehensive

    Fully comprehensive car insurance offers the most cover, and includes all of the above as well as a range of extra protection for your own car 

What are the pros and cons of pay-as-you-go insurance?

Pay-as-you-go car insurance works quite differently to standard car insurance policies, so it’s useful to be aware of the pros and cons of this type of cover:

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    The advantages of pay-as-you-go insurance

    • You may be able to save money if you’re a low mileage driver

    • It can also be more economical for high-risk drivers already facing high premiums

    • You can earn discounts on future premiums through good driving

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    The disadvantages of pay-as-you-go insurance

    • It could work out more expensive for high mileage drivers

    • Some policies have limits on when you can drive or age limits for young drivers

    • Your insurance costs might increase if your circumstances change

    • On most PAYG policies you’re less likely to earn a no claims bonus

What cover can I get with pay-as-you-go car insurance?

The specific types of cover you’ll get from your policy will depend on the level of protection you take out as well as any add ons you might select. A good fully comprehensive policy should offer most of the following either as add-ons or as a standard part of your cover:

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    Your vehicle

    Cover for your vehicle against theft, loss or damage resulting from an array of causes – check your policy for more details

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    Third-party damage

    Cover for damage you cause to another person, their property or their vehicle

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    Breakdown cover

    Cover for the cost of calling out emergency roadside assistance and repairs should your vehicle break down

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    Motor legal protection

    Cover for any legal fees you might face related to a car insurance claim

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    Personal accident cover

    Financial compensation for you or your dependents if you’re seriously or fatally injured in a road accident

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    Multiple cars and drivers

    Cover for two or more cars on one policy with multi-car insurance, or for further named drivers on the policy for one car

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    Car contents

    Cover against theft, damage or loss of personal items you keep in your car, like sat-navs or clothes

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    Driving abroad

    Cover for taking your car overseas – often included as standard up to third-party level with fully comprehensive available as an extra

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    Keys, fuel and windscreen

    Other policy features like cover for lost keys, wrong fuel and cracked windscreens

What our customers say

Based on 86,423 reviews 4.7/5 of our customers would buy from us again
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Why compare pay-as-you-go car insurance quotes with MoneySuperMarket?

Our mission is to make finding cheap car insurance easier – and when you take out cover with MoneySuperMarket you can benefit from:

  • Paying for the cover you need

    With pay-as-you-go cover you’ll pay for the hours or the miles you drive – which means you could save on your car insurance premiums if you aren’t a frequent driver

  • Save Time & Money

    For free, compare tailored quotes in minutes and find the cheapest deal for you. If you find the same deal for less, we'll price match* and give you a £20 gift card.

  • Trusted

    With 30 years' experience, we're trusted by our customers. We only work with insurance providers authorised and regulated by the Financial Conduct Authority (FCA).

*Restrictions and T&Cs apply, click here for details.

How much does pay-as-you-go insurance cost?

The cost of your pay-as-you-go insurance will vary depending on a number of factors including:

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    Your age

    How old you are and your driving experience impact your insurance

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    Your mileage

    Your premiums are usually cheaper if you do less mileag

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    Your car

    The type, age make and model of your car affect the price of your insurance

Sarah Tooze

Our expert says


If you’re a low mileage driver or you’re a new driver facing a high premium, you should consider pay-as-you-go car insurance as it could work out cheaper for you. Having telematics or black box insurance, where a device or app monitors how the car is being driven, will reward you for safe driving whereas pay-per-mile insurance only tracks the miles you do. Make sure you check the small print for an annual mileage limit, cancellation fees or other restrictions

- Sarah Tooze, Car & Van Insurance Expert

Pay-as-you-go car insurance is similar to short-term car insurance, but not exactly the same. While a pay-as-you-go policy charges by the mile or by the hour, temporary car insurance policies offer the standard level of protection – and you pay a set price for a set amount of time you’ll be covered.

They can be more economical than year-long policies in certain situations – for example, if you only need cover for a day to move home, or for a month if you’re borrowing a car from a friend.

Some insurers providers offer black box insurance, but it's not always necessary to have a black box to get PAYG car insurance. Black box car insurance involves having a black box installed into your car by an approved mechanic – however they may also offer a plug-in device that goes into your cigarette lighter, or an app that uses your mobile phone’s GPS tracker.

Pay-as-you-go car insurance can be cheaper than an annual policy – it really depends on how, when and where you drive.

You might find pay-per-hour cover isn’t as useful in a big city where you might often be sat in traffic, but if you’re a low mileage driver you could save money with a pay-per-mile policy.

Likewise if you’re in the country and you’re often driving fast along open country lanes, pay-per-mile cover might work out less economical than a pay-per-hour policy.

Your insurer will keep your driving data safe and secure, generally just using it to monitor your driving habits and checking any claims you make or someone else makes against you. They may also share it with their business partners, but they won’t sell it.

Pay-as-you-go policies are likely to have all the same standard exclusions as a regular policy – but specific exclusions you might look for include:

  • Commercial or business usage: You’ll likely need specialist business car insurance if you use your car for commercial reasons – you might find some pay-as-you-go providers won’t offer commercial cover at all

  • Track days or rallies: You may also not be able to attend track days, rallies or trials if you use telematics or pay-as-you-go cover

  • Device tampering: If you tamper with your device, whether it’s a black box or a plug-in device, this will almost certainly void your cover 

With pay-per-mile or pay-per-hour policies it’s only the time or distance you drive that will be tracked, but for full telematic policies they’ll also track your speed, cornering, braking and other aspects of your driving performance.

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