UK drivers could make a saving of up to £300 a year on their insurance by switching to a pay-as-you go policy, new research has suggested.
Cuvva, the pay-as-you-go insurance app, found more than 800,000 motorists are paying too much for car insurance when they only use their vehicle less than once a week.
With the average annual premium estimated to be £847, drivers who only occasionally take the car out for a spin are paying the equivalent of £16 an hour.
The app makers say by switching to a policy that is tailored to how often customers are behind the wheel, the annual premium could drop to £570.
As to be expected, Cuvva found Londoners are more likely to leave their cars at home and opt for public transport or walking.
It is estimated that 138,000 drivers in the capital use their vehicle for just one hour a week or less.
Those living in the northwest, northeast and Wales are likely to use their car more frequently.
Cuvva said motorists may have noticed the cost of their insurance going up by 11% this year. Changes to the discount rate used to calculate personal injury claims are to blame (and we explain more about this here).
Cuvva's report shows young drivers are feeling the brunt of expensive premiums and often end up spending 20% of their salary on car insurance.
Freddy Macnamara, founder and CEO of Cuvva, said: “A lot of drivers only need their car once in a blue moon, yet they often end up paying the same price for their insurance policy as someone who is constantly on the road.
"This is clearly an unfair situation and the insurance industry needs to start promoting a more flexible approach, encouraging drivers to seek out cost-effective insurance policies which suit their needs.
“At a time when high inflation and low wage growth are putting a real squeeze on household budgets, the potential to shave hundreds of pounds a year off car insurance through switching from an annual policy to pay-as-you go could be the difference between affording a holiday or not.”