Published: 12/03/2021

Lower mileage drivers could save by switching to pay-by-mile insurance

  • Car insurance claims reported to declined by 26% in 2020 as drivers keep cars at home during lockdowns
  • Data from pay-by-mile car insurance provider, By Miles, shows daily journeys are down 51% year-on-year in the latest lockdown
  • There are more low mileage drivers than ever, as half of motorists (49%) plan to drive under 6,000 miles in 2021
  • Lower mileage drivers could save up to £169 on their premiums by switching to pay-by-mile

12 March 2021 – Enquiry data submitted to shows car insurance claims fell by a substantial 26% in 2020, compared to the previous year, as lockdowns and social distancing restrictions forced drivers to reduce journeys, according to new research.

The findings from and By Miles reveal that since national lockdowns began in response to the COVID-19 pandemic, the number of car insurance claims reported dropped sharply, and has remained significantly lower than in previous years. April 2020, the first full month of the first lockdown, saw the steepest drop. Claims reported for incidents occurring in April 2020 plummeted by a huge 63% compared with the month before and decreased by 69% year-on-year.

Claims over the winter months, which historically see a spike due to increased Christmas traffic and tricky weather and road conditions, were also down. Claims reported as occurring during the second lockdown, in November 2020, dropped 30% compared to the same month in 2019. In December, claims also fell 28% year-on-year.

The decline in claims reported is likely to continue this year as motorists are set to make fewer journeys than they would outside of the pandemic. The latest mileage data from drivers on pay-by-mile policies with By Miles shows the average mileage driven daily fell by 51% in January 2021 during the latest lockdown, compared to January last year.

In addition, with the increase in working from home, and a cut in commuting, drivers can keep a closer eye on their cars during the day which will deter thieves. Enquiry data from shows the proportion of drivers keeping their vehicle at home during the day, rather than at an office or factory car park increased to 68% at the end of 2020 – up from 63% at the end of 2019.

Enquiry data also reveals that motorists expect to drive for an average of 6,970 miles in 2021 – 237 fewer miles than they expected to drive in 2020. The proportion of low mileage drivers has also increased slightly. Half of motorists (49%) plan to drive fewer than 6,000 miles in 2021 – up marginally from 46% in 2020.

Low mileage drivers could save by switching to a pay-by-mile policy

In response to the fall in claims, the average premium for motorists who drive fewer than 6,000 miles per year dropped to £776 at the end of 2020 from £846 at the end of 2019. However, lower mileage drivers could make a further saving of up to £169 by switching to pay-by-mile insurance. Pay-by-mile policies are designed to be cheaper for lower mileage drivers because these motorists use their cars less often so are much less likely to have an accident and make a claim.

The total amount By Miles members paid for their insurance over the course of 2020 fell 25%, directly in line with the reduction in their mileage. That means each policyholder saved an average of £44 from the price they had been quoted at the start of the year.

Dan Hutson, head of motor at, said:

“Last year saw a significant fall in claims, particularly in the months when social distancing restrictions were strictest. This trend is likely to continue in 2021 as restrictions remain in place for a significant part of the year. Even after the pandemic, we anticipate seeing fewer claims as people use their car less for commuting by regularly work from home.

“With falling premiums, insurers seem to be passing on some of the savings from the drop in claims. However, these savings will only be available to drivers who shop around for the best deal when their policy comes up for renewal. For lower mileage drivers, pay-by-mile policies could be the most cost-effective option. These flexible policies may also benefit motorists who are unsure about how often they will use their cars this year as payments will be based on the miles they actually drive.”

James Blackham, co-founder and CEO of By Miles, said:

“As the nation’s drivers were plunged into lockdowns over the course of the last year, the reduction in cars on the roads demonstrated loud and clear what we’ve known for a long time - the less time your car spends on the road, the less likely you are to be involved in an accident. As a result, if you’re driving less, you’ll make fewer claims, so we believe you should be paying less for your car insurance.

“While we all hope for a return to normality in the coming months, driving habits have certainly changed, and pay-by-mile car insurance is the fairest way to offer drivers a way to save money in real-time when they’re not driving their cars. It’s simple and the savings just happen automatically, without you having to lift a finger.

“But usage-based insurance isn’t just a way for drivers to save money during a pandemic. Insurance that encourages and rewards a reduction in car usage is a win-win. Imagine a future where motorists make fewer claims, drivers pay less for their car insurance, there’s less congestion, reduced emissions, public health improves, and the roads are safer for all - cyclists and pedestrians included. That’s the new normal we’d like to see.”


Notes to editors:

Claims data is based on volume of incidents reported in 2020 car insurance enquiries. Drivers need to provide the dates of any incidents over the past five years to receive a car insurance quote.

Saving figures for pay-by-mile insurance based on By Miles customers in January 2021 who provided a best alternative price when getting a quote.

About was launched in 2006 and has grown rapidly over the past fifteen years to become one of the UK’s leading price comparison websites. provides customers with an easy way to make the right choice for them on a wide range of products including motor, home, life, travel and pet insurance as well as utilities and money products such as credit cards and loans. actively works with its brand partners to help provide great services to customers. is a trading name of Compare The Market Limited. Compare The Market Limited is authorised and regulated by the Financial Conduct Authority for insurance distribution (FRN: 778488) and is registered with the Financial Conduct Authority under the Payment Services Regulations 2017 (FRN: 911617) for the provision of payment services.

About By Miles

By Miles is a UK company that provides pay-as-you-drive car insurance aimed at those who drive under 7,000 miles a year. The company launched its first pay-by-mile policies in July 2018.

Drivers pay a small upfront sum for an annual policy and are then billed at the end of each month for the miles they drive. This offers many drivers the opportunity to cut their bills if they mostly use their cars for regular short trips or at weekends.

By Miles policies are fully comprehensive, underwritten by a panel of experienced insurers including Zurich Insurance Plc, and as of 30th January 2021 were rated 4.7 out of 5 stars on Trustpilot. By Miles is authorised and regulated by the Financial Conduct Authority and has won ‘Car Insurance Provider of the Year’ at the Insurance Choice Awards 2020 and 2019.

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