Traditional Car Insurance isn’t designed to benefit low mileage drivers. Infact, millions of motorists around the UK who drive fewer than 7,000 miles per year are paying significantly more than those who spend more time on the road.

Low mileage penalty
After conducting extensive research on website MoneySuperMarket, pay-by-mile car insurers, By Miles, found that the most popular mileage bracket chosen by drivers lay between 5,000 and 6,000 miles.

While you may assume that less time spent on the road would equate to less risk and therefore, lower premiums, they actually found that those who fell into this bracket were quoted on average around £215 more than motorists completing 11,000 to 12,000 miles a year.

So, why is this?

Paying the price for higher mileage drivers 
In order to keep insurance premiums affordable for higher mileage drivers, many car insurers spread the cost across all their customers. This means that those who drive less often end up paying more in order to subsidise the increased risk that comes alongside higher mileage drivers. According to their research, By Miles found that from the 2.5 million quotes analysed, 19 million low-mileage motorists in the UK are in danger of being unfairly overcharged for their Car Insurance. 

Who’s the higher risk?
Despite low-mileage drivers paying in excess for their premiums, higher-mileage drivers are statistically more likely to make a claim on their policy. Those driving 12,000 miles per annum were found to be 50% more likely to have made a claim in the past five years compared to those driving under 7,000 miles. So, why are people who drive less getting unfairly charged for others’ increased level of risk and, more importantly, what can be done to rectify this?

An open letter to insurers
While traditional Car Insurance may not be the most cost-effective option for low-mileage drivers, unfortunately for a long time it has been the only option available. But things are changing. After By Miles’ research highlighted this issue, they called upon the Association of British Insurers (ABI) to extinguish the low mileage penalty, and sent them an open letter to request that insurers review their pricing to offer great transparency on their pricing and consider adjusting their premiums to reflect the reduced risk levels of those who drive less frequently.

Pay-by-mile Car Insurance
By Miles have also created their own solution for those who don’t drive much, in order to provide an option that isn’t geared toward benefitting higher-risk drivers.

As an alternative to traditional Car Insurance, By Miles pay-by-mile Car Insurance aims to empower drivers to take charge of how much they pay, based on the number of miles they cover.

How it works 
Each driver is given a fixed annual cost, or a ‘base fee’. The cost of your cover will then be determined by how many miles you drive which will then be added on top of this initial fee.

To help keep you on track, each By Miles policyholder will be sent a Miles Tracker which is easily plugged in under the car’s dashboard. If you have a connected car this can be done without a tracker. You can then either download the By Miles app or access your online dashboard to see the cost of your journey. As soon as you finish a journey, this will appear on your app or online.

Key benefits of By Miles Car Insurance

• Fair, flexible cover
• Transparent pricing
• Simple billing and reminder system
• Quick quote
• No extra charge for No Claims Discount protection – this comes with the policy
• Capped mileage cost at 150 miles per day
• Award-winning customer service
• 24-hour claims support
• Onboard car medic
• ‘Find my car’ feature

Get a By Miles quote
To quickly check whether By Miles could save you money on your Car Insurance, you can use their online calculator for an initial quote estimation here. To find out more about the cover and for a transparent, unbiased discussion as to whether this is right for you, just call Watkin Davies on 02920 626 226.