CAR ARTICLE

Someone's watching you

There are many reasons why car insurance is costly and many factors are taken into account when quoting premiums. Companies are always on the lookout to offer new ways of quoting for and selling car insurance and one of these new products, it has been said, is tantamount to having you watched!

This new 'pay-as-you-go' policy involves installing a GPS system into your car which means that you can be tracked via satellite. How and where you drive is tracked and you then pay for your car insurance on a monthly pay as you go basis.

You are typically charged a flat monthly fee, plus are charged per mile. This is great for those who do little with their car as they wouldn't pay a lot for their insurance. However, for people who do a lot mileage, the policy is not suitable.

However, for the young driver whose car insurance premiums are hefty anyway, they could make great savings on their car insurance by taking out one of these policies particularly if they only used their car to run to and from work.

However whether you personally would make any savings by taking your car insurance this way all depends on the base rate per mile that you would be charged.

Another big disadvantage that may persuade the younger driver away from this scheme is the fact that drivers are charged more per mile if they drive between certain hours. Research has showed that the majority of accidents which involve the young driver occur between the hours of 11am and 6pm.

As a result it is thought that young drivers travelling between those hours may in fact be fined for doing so. In effect this would mean that although you could make savings on your car insurance by going with the pay as you go scheme, if you had to journey out many times during the day the fines could quickly reduce the savings.

So while it is debatable whether you could save on your car insurance going this way, one major plus is for all those who struggle to pay their insurance is that with this scheme you can use the car for however much you can afford to pay then simply take up walking or the bus for the rest of the time!