Motor Insurance Companies Launch 'Pay As You Go' Insurance

Motor insurance provision could be in for a major shakeup as motor insurance companies pilot 'black box' recording and tracking devices fitted to cars.

The system would make possible 'pay as you go' motor insurance, already popular in the US for those who use their cars less often. This could be a big help for those on a tight budget and who do not use their car very often.

Drivers could be charged as little as six pence a mile between six am and 11pm, as accidents are less likely to happen during the day. The charges would leap to £1 a mile after this time however.

There would also be a small fixed motor insurance charge to cover the risk of theft and damage while the car is stationary. Plus there will still be provision for a no claims bonus as with standard insurance policies.

While the monitoring systems may promise drivers lower motor insurance premiums, civil liberties groups have raised concerns of 'big brother' style tracking.

"Some people will be concerned about having technology which tracks where they are and where they are going," said an AA spokesman.

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