UK insurer Norwich Union is currently trialling what it calls “Pay As You Drive” insurance – drivers aged 18 to 23 can sign up for the pilot programme if they feel so inclined.
The company fits a GPS-based tracking device in the car and instead of paying a flat yearly premium for their insurance cover, customers are charged by the mile – with costs varying according to speed, location and time of day.
It all sounds very Big Brother, but then millions of consumers happily let supermarkets monitor what they eat through loyalty card schemes, so who knows? Maybe it will catch on. Unlike traditional insurance policies, Pay As You Drive lets customers cut their costs if they are having a bad month with their credit card or, alternatively, thrash through the town centre at 11.30pm if they’re feeling flush.
At present the project is in the research and development phase, according to company spokesman Doug Vallgren. He expects to be ready for a UK roll-out in about 12 months’ time.
Norwich Union's parent company, Aviva, also owns Lex, the UK's biggest fleet leasing firm, so could presumably extend the same approach to that business - assessing the remaining worth, or lack of it, of a car under lease terms. Again, thrash the car, drive on rough roads, park near the coast and its salty breezes, and you may feel a pain directly in the wallet.