A pay as you drive scheme is a new type of policy to help new and young drivers with low mileage with an aim to save them money based on the miles they drive travel. It works in exactly the same way as a user buying credit for a pay as you go mobile phone, driviers buy the miles in the pay as yoiu insure contract and travel according to the amount of miles you have. This way, new and young drivers can control the cost of the premiums. 

Now, you may be wondering how insurance companies keep track of the number of miles driven? Telematics, which is the same technology used to measure how good or bad some young drivers drive. A telematics system is a small blackbox fitted benath the bonnet of your vehicle. It is little bigger than mobile phone and is used in various deviced including satelite navigation systems. It will gather the information including, speed, acceleration and time you drive and relay all of that info back to the insurance companies for their reference. They then use that information and charge you acording to that.

Most pay as you drive schemes work by charging the customers a one of start up fee and in return, you receive a number of miles to get you going. When a driver runs out of miles, they must top up to ensure they are still insued. If you have a road traffice collision after running out of miles, you will NOT be covered. On the other hand, if at the end of a period / premium, the driver doesn't use all the miles, they will be refunded, which is really good! 

In conclusion, Pay as you drive schemes are good, especially for those who only travel short distances and do not use the car as much, but if you do travel by car regularly and for long distances, it might not be the best option for you. 

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