We're all used to the concept of a pay as you go mobile phone, but now there is the option to apply the same principle to your car insurance. This latest type of insurance is a step to cut costs for younger drivers.
While it won't bring the premiums of a 19 year old down to the level of a 40 year old, it will help secure a substantial saving on their policy. Insurers are recognising that although drivers under 25 have a higher percentage of road accidents, not all drivers in this age group are unsafe or reckless.
Therefore, a driver in the high-risk age group can opt for a 'black box' - similar in principle to the ones used in aircraft - fitted to their car. This sends details of journeys to the driver's car insurance company, who can then work out the costs per mile. During the day, driving is relatively low-cost, starting from 5p per mile, in quiet times. During rush hour the cost per mile will raise, and the highest cost comes between the hours of 11pm and 6am, when the fee is a flat £1 per mile.
The aim of this is to prevent young drivers from using their cars late at night, which is when most accidents tend to happen. There is a fee for fitting the box, but for a young, safe driver the benefit of cheap car insurance will compensate for this. The average saving this type of premium can give is around 30 - 40%. To an age group traditionally quoted in the region of £2000 per year for insurance, that's an amount not to be scoffed at.
Of course, if you don't like the idea of a black box tracking your every move, you can always opt for taking a Pass Plus course, which can give you a similar discount. If you've already taken one of these courses, mention it next time you apply for a car insurance quote and you may be surprised at the difference.
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