RAC launches 'a new kind' of car insurance

The 'pioneering' project charges drivers by mile coverage instead of monthly or annually.

The car insurance, dubbed 'Pay the Mile' works simply; you pay £50 for you insurance to be activated, and then you will be charged every month a small fee in order to insure your vehicle when it's not used used, and also an additional fee of as little as 4p per mile.

Drivers who sign up to the scheme will be able to track their insurance fees through a special app and also through a tag that is fitted to their car's windscreen that detects when the car is being used, and then transmits the distance travelled to the app in order to work out the cost.

This scheme was developed in order to appeal to a growing amount of people aged over 21 who drive fewer than 6000 miles a year, predominantly due to the impact of the Coronavirus pandemic.

RAC managing director Mark Godfrey stated that the automotive market has "been ripe for a shake-up for some time", and that they were excited "to introduce a truly pioneering new product which is ideally suited to drivers who don’t do that many miles.”

There is much benefit to this scheme, as this means that if you live in urban areas where you don't need to drive much, then your car insurance will cost you less because you will be covering less distance, although to many older drivers I think it would sound too complex, and if you are one of those drivers, then stick to car insurance from Tesco Bank or Admiral.

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Comments (2)

  • Would cost me an extra 700 quid a year, or almost 4 years premium at current rates.

    And that is taking the lower charge of 4p/mile.

    I am not sure that "to many older drivers I think it would sound too complex" is true. I am an "older" driver and find it simple to work out. We are such low risk in claims terms that our insurance is dirt cheap anyway.

      2 months ago
  • So this will cost me £150 + whatever premium they slap on top. I'm insured for 10k miles fully comp and it costs less than £230..... I do 1/4 of that miles. I don't think this will be cheaper in all honesty.

      2 months ago