Usage-based (pay-how-you-drive) car insurance
What is usage-based car insurance?
Usage-based car insurance - also called telematics or pay-how-you-drive cover - prices your premium partly on how, and sometimes how much, you actually drive. A device or app measures things like braking, speed, cornering and mileage, and safer drivers can earn lower premiums or rewards. It can be a good deal for careful, lower-mileage drivers, but it means sharing your driving data.
Key takeaways
- Usage-based cover prices premiums on how (and how much) you drive.
- Telematics via an app or device measures driving behaviour.
- Safer, lower-mileage drivers can earn lower premiums or rewards.
- It requires sharing your driving data with the insurer.
- Best suited to careful drivers confident in their habits.
How it works
A telematics app or in-car device records driving data - harsh braking, acceleration, cornering, speed and often distance. The insurer uses this to reward safer driving with discounts, cashback or lower renewals. Some policies also pause or reduce cover when the car isn't being driven.
Is it right for you?
Usage-based cover tends to reward careful, lower-mileage drivers - if that's you, it can cut your premium meaningfully. The trade-off is privacy: you're sharing detailed driving data. If you drive a lot or aggressively, a traditional policy may work out better. Compare both.
Frequently asked questions
Does usage-based insurance track my location?
Can usage-based insurance save me money?
What is telematics?
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