Not driving as much?
Pay by Mile is a new kind of car insurance for lower mileage drivers
If you drive less than 6,000 miles a year (that's 110 miles a week), you're probably paying too much for car insurance. That's where Pay by Mile can help - simply pay a low monthly premium to insure your car while it's parked, then a few pennies for each mile you drive.
How does Pay By Mile car insurance work?
Stick your clever drive tag to your windscreen and it will measure your mileage (and nothing else).
Connect your drive tag to the app to track your trips, calculate costs and more.
Only pay for the miles you drive, plus a monthly premium to insure your car while it's parked. No annual contract, just pay as you go.
Who is Pay by Mile car insurance for?
Pay by Mile is designed to cut bills for people who don't drive much. It's just the ticket if you do less than 6,000 miles a year - or 110 miles a week. So, if you mostly use your car for short trips or at weekends, you could save by using pay as you go car insurance.
Low mileage drivers are less likely to make an insurance claim. Pay by Mile rewards you for that. With traditional insurance, you may end up subsidising the cost of higher mileage drivers. But not with us!
How does Pay by Mile compare to traditional car insurance?
| Pay by Mile | RAC Comprehensive Car Insurance |
5 Star RAC Car Insurance Plus |
|
|---|---|---|---|
| Uninsured driver promise | |||
| Courtesy Car as standard (subject to availability and eligibility) |
|||
| Child Seat Cover | |||
| Personal Accident Benefit | |||
| Third party liability | |||
| Windscreen cover | |||
| Personal belongings | Up to £1,000 | Up to £150 | Up to £250 |
| Medical expenses | Up to £500 | Up to £100 | Up to £250 |
| Misfuelling | |||
| Replacement locks | |||
| Electric vehicles - battery and charging cables | |||
| Loss or damage | |||
| Foreign travel |
Pay by Mile Car Insurance is suitable if…
You’re between 21 and 75
You drive less than 6,000 miles a year
You’ve been a UK resident for more than 5 years
You have at least 1 years No Claims Bonus
Your vehicle is less than 20 years old, less than £60,000 in value
Your vehicle is in insurance group 35 or below. Vehicles in groups greater than 40 must have a power output of lower than 250 bhp
You’ve got an Android phone version 8.0 or above or an iPhone iOS version 13 or above
Other eligibility criteria may apply
Learn more about Pay by Mile car insurance
Q. What is Pay by Mile car insurance?
Pay by Mile (also known as pay as you go or usage-based) is a new type of car insurance that allows you to pay for the miles you drive and save when you don’t. Traditional car insurance works on an estimate of the miles you drive, so if you drive less, you’ll pay the same.
Q. Is Pay by Mile car insurance cheaper?
As a type of pay as you go car insurance, our Pay By Mile cover could save you money if you’re over 21 and drive under 6,000 miles a year. Every driver and vehicle combination is unique so we can’t promise anything but you could be paying as little as 4p per mile.
Q. How does pay as you go car insurance work?
Pay by Mile, from RAC Car insurance is a monthly subscription-based, pay as you go car insurance product. You pay a monthly parked premium to cover your car while it's not being driven, and a per mile amount to insure you whilst you’re driving. You’ll be billed monthly, like other subscriptions. Your monthly insurance price = monthly parked premium + (per mile premium x miles driven).
Q. I already tell my insurer my mileage, why is RAC Pay by Mile car insurance different?
Traditional car insurance finds it difficult to track accurately what mileage you are driving, so apply an average to their pricing. That can often be a lot higher than what you tell them. Pay by Mile car insurance charges you for the miles you actually drive.
Q. What are the benefits of our pay as you go car insurance policies?
1. A fairer way of insuring your car
If you’re driving less, we think you should pay less. Or at least only be paying for what you use. With traditional car insurance the miles you drive is only an estimate, so if that changes, your policy won’t. You could be paying too much in the first place. With a pay as you go car insurance policy like Pay by Mile, you pay when you drive and save when you don’t.
2. No extra charge for paying monthly
The good news is that we don’t charge you extra for paying monthly.
3. No ties
You can cancel the policy at any point and with immediate effect. Don’t worry, there are no cancellation fees. It is a true pay as you go car insurance policy.
4. No cap on miles
There isn’t a cap on the miles you can drive. You just pay for the miles you drive.
Q. Can I drive my car before I receive my drive tag?
Yes. If your policy starts before your drive tag arrives you can still drive your car. Make sure you fit and activate it as soon as you receive it. If your cover starts after you get your drive tag, you should set it up before you start driving. If you were to have an accident when the drive tag was not activated you will pay a £1000 excess instead of the excess you choose.
Q. General Pay by Mile insurance questions
Q. How do Pay by Mile monthly payments work?
Each month you will be charged via direct debit for your next monthly parked premium and for the miles driven in your previous month.
Q. What happens if I don’t have my phone in the vehicle?
If the phone is not present in the vehicle when a journey has taken place, then an offline journey will be registered as having taken place and a static premium charged for that journey. For our app to work, you don’t need to have it open and shouldn’t need to interact with your phone whilst driving. Please remember that it’s illegal to hold a phone while driving. You must have hands-free access. The device must not block your view of the road and traffic ahead and you must stay in full control of your vehicle at all times.
Q. Is there a limit on how many miles I can drive with a Pay by Mile policy?
There is no limit - you pay for the mileage driven.
Q. What happens if I go over my annual/monthly estimated mileage?
You pay for the miles you drive. If you increase the miles you drive, you can simply update your mileage in your online account.
Q. How do I get my No Claims Bonus?
No claims bonus is accrued on a 12 monthly basis. When you reach your anniversary (12 months insurance) we will confirm your no claims bonus and provide you with proof.
Q. What happens if I get a new car?
If you purchase a new car just access your online account to make a change to your policy. You will need to remember to move your drive tag into your new vehicle.
Q. Can I go abroad on the Pay by Mile policy?
Yes, the full cover is shown in your schedule of insurance and provides cover in any country in the territorial limits for up to 30 consecutive days up to a maximum of 90 days between the start date and the anniversary and for every year between 2 anniversaries. Don't forget to request a green card before you travel.
Q. What are my excesses?
Insurance claims apply an excess, the amount you have to pay in the event of a claim, and these are shown in your policy schedule. If you were to have an accident when the device was not activated you will be charged an excess of £1000 instead of the excess you have chosen. You'll need to make sure you check the level of cover another driver may have in place to drive your car as it may be third party only cover.
Q. Who is my insurer?
Highway Insurance Company Limited are the Underwriters for RAC Pay by Mile Car Insurance. Highway Insurance Company Limited, registered in England and Wales number 3730662 is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority, Register number 202972. Registered address: 57 Ladymead, Guildford GU1 1DB.
Q. Where do I find my documents?
Please access your online account to view, print and save your policy documents.
Q. What happens if somebody else uses my car who is already insured?
As this is a mileage-based product, so long as your phone is present in the car, the number of miles driven will still be recorded and you will be charged. This also enables other policy cover to be in place, e.g. theft from a place that is not the address registered on the policy. Please note, if your phone is not present, you will be charged a static premium for the journey. Additional drivers are not covered under this policy and you will need to check the level of cover for any other driver who will be using your car.
Q. Will pay as you go car insurance cover me like an annual policy?
Pay by Mile, from RAC Car Insurance provides comprehensive cover, including our uninsured driver promise, third party liability and loss or damage, to name a few. See your policy document for more information.
Q. Pay by Mile policy changes and claims
Q. How do I make a claim?
Please visit our existing customers page for information on how to make a claim.
Q. How do I make a change to my Pay by Mile policy?
You can make changes to your policy at any time, just access your online account . No admin fees apply to changes made to your policy.
Q. Pay by Mile drive tag
Q. What is the Pay by Mile drive tag and how do I install it?
The Pay by Mile drive tag is a small device that is used to track the miles you drive. To install it, you simply position it in the windscreen of your car. It's about the size of an Oreo biscuit.
Q. What information is the Pay by Mile drive tag collecting and how secure is my data?
The Pay by Mile drive tag only confirms whether your vehicle is stationary or moving. When your vehicle is moving, the Pay by Mile App will collect journey information. You can find out more about how your data will be used by visiting our data privacy policy.
Q. What happens if I do not fix my Pay by Mile drive tag in the car and download the app?
The drive tag and Pay by Mile app must be in place for us to measure your mileage, if these are not activated then the policy will be cancelled.
Q. What do I do if my Pay by Mile drive tag is not delivered, lost or damaged?
If you do not receive your drive tag, please access your online account and advise us.
Q. How do I activate the Pay by Mile drive tag?
- Download the Pay by Mile app here – there are links to both the Android and iPhone versions. You will need to have a compatible mobile - either an Android phone version 8.0 or above or an iPhone iOS version 13 or above.
- Open the app and click on ‘create account’ (only use the log in button once you’ve created your app account).
- Allow location access – you will need to set this to ‘Allow while using the app’.
- You will need to have your phone with you when driving (with Bluetooth and GPS capability enabled).
Q. How do I know the Pay by Mile drive tag is working?
The app will display the miles driven.
Q. Do I need to return my Pay by Mile drive tag if I cancel my policy?
No, you don’t need to return the device.
Q. Will my Pay by Mile drive tag help me in an accident?
The drive tag only measures the distance you are driving and will not measure or advise of anything in the event of an accident.
Q. My drive tag has fallen off my windscreen, what should I do?
The drive tag shouldn't fall off your windscreen if you have used the adhesion tape provided, however on the rare occasion this does happen please contact us immediately via your online account.
Q. My windscreen needs to be replaced; how do I transfer the drive tag?
Should your windscreen need to be replaced the windscreen replacement company can remove your drive tag and attach it to the new window.
Q. Pay by Mile app
Q. Where do I download the Pay by Mile drive app?
Our app download page has links to the app on both Google Play and App Store.
Q. Why do I need the Pay by Mile drive app?
The Pay by Mile app provides the information on the miles you have driven. That is used to calculate your monthly mileage cost.
Q. Why hasn't my information updated on the app?
If you have little or no signal it may affect your service. If the information on your app doesn't update for a few days, then please contact us. Details can be found on our existing customers page. For journeys where your app hasn’t been able to track the mileage a static mileage will be applied.
Q. I've forgotten my login details for my Pay by Mile drive app, what do I do?
There is a forgotten password prompt within the app.
What is pay as you go car insurance?
With pay as you go car insurance, rather than being tied to a long-term contract, you pay as you go on a monthly rolling subscription – allowing for more flexibility and you pay depending on how much you use your car.
There are a few types of pay as you go insurance. Here is a quick overview to help you decide which one is right for you:
Pay by mile insurance
This is where you track the number of miles you drive and you pay for each mile you drive, plus a low monthly premium. Other types of insurance can’t track your miles so apply an average to their pricing, which can be higher than what you tell them. So, if you’re over 21 and drive less than 6,000 miles, you could save you money with pay by mile insurance. Get a quick quote here.
Pay how you drive insurance
This type of insurance is ideal for drivers who have just passed their test and want to lower their premium. It uses a 'black box' to monitor the way you drive, including things like braking and acceleration. Your premium is worked out based on how safe a driver you are. So, the better your drive, the lower your insurance. We call this black box car insurance or telematics insurance.
Pay per hour insurance
If you only need to insure your car or someone else’s in the short-term, from 1 hours up to 30 days, temporary car insurance could be the answer. Perhaps you’re borrowing a car, taking a trip for work or car sharing.