Around nine out of ten drivers rate their motoring skills as above average which is unrealistic to say the very least, but for those of us who think we do drive better than those around us there is a new car insurance concept which offers an intriguing means of saving money on our premiums. This somewhat revolutionary new idea presents itself in the form of "pay as you go" or "pay as your drive" car insurance and in similar in many ways to the mobile phone tariffs which most of us are already familiar with.

With Pay-As-You-Drive car insurance, you are only charged for the number of miles you drive and in accordance with the time of day you choose to drive. For example, a young motorist who only drives their car during the daytime will only be charged a few pence per mile although between the hours of 11pm and 6am the cost of insurance rises dramatically. This is because the majority of accidents caused by young drivers typically happen during the night according to research carried out on behalf of many well known car insurance providers.

The way that Pay-As-You-Drive car insurance works is that your vehicle is fitted with a GPS device which is installed for a one-off fee so that the insurance company can accurately monitor your driving activities and charge you accordingly. Although many people regard this as an invasion of privacy and personal freedom, this criticism can be answered by the fact that those who drive safely and infrequently will find their insurance premiums to be much more affordable than high-mileage motorists who tend to be in a higher risk category as far as insurers are concerned.

Other advantages provided by this new breed of car insurance include environmental benefits as by reducing the amount of miles a young person drives there will also be a relative reduction in pollution. However, the downside of PAYD car insurance is that many people find the thought of having their car fitted with a tracking device and being watched by big brother to be incredibly off-putting. In fact, one in every three drivers who were asked about getting a "black box" fitted to their vehicle have stated clearly that they would never participate in such a scheme even if it meant that they would never have to pay car insurance ever again!

Pay-As-You-Drive car insurance is typically paid in one of three different ways. Firstly, you can agree to pay for your policy upfront for an estimated number of miles with the difference being settled once your annual premium expires. Secondly, you can pay your usual premium and then apply for a rebate if your mileage falls below a set threshold. The third payment structure involves paying a monthly bill which is calculated by the number of miles driven in any given calendar month.

Whatever you decide to do, the best way to save money on your PAYD car insurance premiums is to shop around using a price comparison website in order to make sure you get the best possible deal for the exact amount of cover you require.