If you don't use your car very often, or only drive short distances, you might be able to save money on your premium by finding an insurance policy that rewards low usage. Sometimes, these are called pay-as-you-drive policies, but they're not your only option. You can also find car insurers that offer lower premiums to people who drive less, as standard.
We have compared 5 providers below, however there may be more available in the market. Be sure to compare quotes from multiple providers to help you find the best deal for your needs.
We requested multiple quotes from over 30 different car insurance brands in Australia. We used the same driver profile, but changed the estimated mileage. Not all of the insurance brands offered a reduced price for lower estimated mileage. Here are some that did:
| Brand | 5,000km | 7,000km | 15,000km | 30,000km | Potential saving between 30km and 5km | Get a quote |
|---|---|---|---|---|---|---|
 | $797.42 | $838.46 | $984.84 | $1,118.63 | $321.21 | Get quote |
 | $938.09 | $938.09 | $1,104.55 | $1,104.55 | $166.46 | More info |
 | $1,000.04 | $1,033.07 | $1,112.00 | $1,263.08 | $263.04 | More info |
 | $900.13 | $1,023.39 | $1,416.42 | $1,533.76 | $633.63 | More info |
 | $845.52 | $856.80 | $867.60 | $958.68 | $113.16 | More info |
 | $874.26 | $874.26 | $946.92 | $1,060.10 | $185.84 | More info |
 | $749.97 | $852.66 | $1,180.13 | $1,383.75 | $633.78 | More info |
 | $671.03 | $762.90 | $1,055.90 | $1,238.09 | $567.06 | More info |
 | $674.31 | $704.00 | $725.40 | $940.96 | $266.65 | More info |
 | $736.34 | $771.27 | $836.67 | $1,073.58 | $337.24 | More info |
*Quotes accurate as of 26 July 2022. Based on a driver profile of a 40-year-old woman, living in Sydney. Car details were for a 2020 Ford Fiesta, with an excess set as close to $800 as the insurer would allow.
Any time you find you're regularly driving less, pay-as-you-go cover is worth considering. Savings with these policies can particularly add up if you drive between 5,000 and 10,000 kilometres annually. You'll often get comprehensive cover with these types of policies. But no 2 policies are the same, so do check the insurance is enough for your needs.
James Martin
Editor of insurance at Finder
Pay as you drive car insurance – sometimes called pay as you go – is comprehensive car insurance with a twist. You get the same level of cover, but you only pay for the kilometres you drive. It's great for people who don't drive very often, or only travel short distances.
However, while some insurance companies advertise specific pay as you drive policies, there are other less obvious ways to access a cheaper premium if you're not driving very much.
That's because some car insurers take estimated mileage into account during the quote process. So although they're not selling a specific pay as you drive insurance policy, you're still claiming a reward for low usage.
If you only use your car from time to time, you might find you're better off using one of these insurers, or purchasing a pay as you drive policy.
There are some differences between policies but, generally, this is how pay as you drive car insurance works. This type of system typically applies to any policy which rewards drivers with a lower premium for low mileage.
Real Insurance is one of the few car insurers in Australia which offers both comprehensive car insurance and policies aimed specifically at people who don't drive very far.
We used the same driver profile as above and requested quotes for a pay as you drive policy and a comprehensive policy. Both policies have the same level of cover, but our research found a significant price difference.
| Estimated annual mileage | ||||
|---|---|---|---|---|
| 5,000km | 7,000km | 15,000km | 30,000km | |
| Pay as you drive | $597 | $738 | Doesn't qualify | Doesn't qualify |
| Comprehensive | $923 | $1,031 | $960 | $1,043 |
| Potential saving | $326 | $293 | N/A | N/A |
Yes! If your driving habits have changed and you're on the road a lot less, you might be able to access cheaper premiums from your car insurer.
Just give your insurer a call, say your situation has changed and ask for a new quote. If you've prepaid for an annual policy, your insurer may provide a partial refund and if you're paying monthly, they may drop your premiums moving forward.
If you don't drive very far every year, a pay as you drive policy might be better for you than normal comprehensive car insurance because you get the same cover for a cheaper price.
Just remember, you'll have to keep your insurer updated if your driving habits change, otherwise you risk extra fees or even a denied claim.
It's worth considering pay as you drive insurance if you don't drive very often or don't drive very far. Typically, this can include:
As with anything, there are some upsides and downsides to pay as you drive car insurance. You should always consider both before committing to a policy.
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