The RAC has launched a new “no ties” insurance system aimed at people driving fewer than 6,000 miles per year.

The idea is thanks to the dramatically reduced amount of miles driven by people since Coronavirus restrictions were introduced last year. The Club says data shows drivers are covering 20% fewer miles than two decades ago, with the possibility of this trend accelerating post-Covid, there is a need for a flexible monthly subscription-based car insurance.

The RAC says Pay by Mile Insurance “meets the changing needs of drivers and works by charging motorists a small agreed per-mile cost only for the miles they actually drive – the Mileage Premium – in addition to a set monthly fee to cover their vehicle while it’s parked – the Parked Premium. So, for those who drive relatively few miles, there may be significant savings to be had.”

Keeping track of miles driven and monthly costs is via an app. Customers stick a small tag (pictured) to their windscreen which detects when their car is in use and transmits the distance travelled to the Pay by Mile smartphone app – no other driving-related data is collected. Then, at the end of each month, the customer pays for the miles they’ve driven, and nothing more.

(Picture – RAC)