A relatively new introduction to the range of policies available, pay-as-you-drive is based on global positioning systems (GPS) and tracks where and when you drive your car. Insurance premiums are usually charged by the mile at different rates depending on the time of day and the class of road on which you drive.
For example, a car driving in the rush hour every morning might be charged more per mile than one driving on an empty motorway in the middle of the night. Insurance companies say this is a good option for those who don't drive often or who only drive at off-peak times, as it may be able to save money overall.
Utilising advanced GPS (Global Positioning System) technology policy holders’ driving movement are monitored and their monthly premiums are subsequently calculated by how often, when and where they drive.
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