Pay As You Drive Car Insurance

Save money on car insurance by only paying for the amount that you drive.

It makes no sense that someone who drives only a few hundred kilometres per year pays as much for car insurance as someone who drives thousands. The pay-as-you-drive feature, also known as drive less pay less, is available from a handful of insurers in Australia.

If you want the advantages of comprehensive car insurance while on the road, but you don’t drive enough to make it worth paying full price, it’s worth considering switching to an insurer with options for paying based on how much you drive.

Receive quotes for pay as you drive car insurance

Name Product Roadside Assistance Accidental Damage Storm Choice of Repairer Agreed or Market Value
Only pay for the kilometres you plan to drive.
Only pay for the kilometres you plan to drive.

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How does pay-as-you-drive work?

With this feature, the cost of your insurance will be based on the amount you drive. If you only do a little bit of driving, your premiums are reduced to reflect this. It works by:

  • Telling the insurer how much you drive. If it’s lower than average, this might be a good option for you. A quote is provided based on how much you say you usually drive, or how much you plan on driving in the upcoming policy period.
  • Topping up if needed. You will be given a kilometre limit based on the information you’ve provided. If this turns out to be too low, you can top up at extra cost. If you need to make a claim, but have exceeded the kilometre limit, an additional excess may apply.

Depending on the insurer, leftover kilometres may be credited to you in some form, or they will simply disappear.

The exception to this formula is QBE black box car insurance, which automatically tracks how much you drive with a special device in your car. It then uses this information and other factors to determine your premiums.

Who can benefit from the pay-as-you-drive option?

Anyone who drives less than the average person can potentially benefit from the pay-as-you-go system. Similarly, anyone who wants comprehensive car insurance but doesn’t drive enough to warrant paying full price for it may also want to consider this. Some people in particular are more likely to find themselves in these situations.

  • Seniors: It’s rare for seniors to drive as much as they used to, especially after retirement. At the same time, a higher likelihood of accidents means that comprehensive insurance is more important than ever. For older drivers, this option means that the price drops when the car isn’t being used, but it still gives you the freedom to top up ahead of time if you’re planning a longer trip.
  • Students: Students might leave their car behind when studying away from home, but they still want cover in the event of flooding, storms and other hazards. Typically, only comprehensive car insurance can provide the necessary protection, but the cost is unreasonable for a car that’s not being driven. Pay-as-you-go car insurance is a great option.
  • Under 25s: Balking at the cost of car insurance for under 25s is an Australian rite of passage. Pay-as-you-go is an effective way of reducing costs. In particular, QBE’s Insurance Box is worth considering as it can also help new drivers earn a no-claims bonus faster and can reward safe drivers with premiums that reflect their driving, not just their age group.

Pros and cons of pay-as-you-go car insurance


  • Lets you get comprehensive car insurance at a lower price
  • Means you only pay for the amount you drive
  • Can be topped up in time for road trips and other plans


  • You may be charged an additional excess for claims made when you’ve exceeded the kilometre limit
  • Only suitable for people who drive less than average
  • Requires more policy management than most typical policies

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