Drivestyle claims it won’t charge you for your car insurance policy up-front. We take a closer look.
Ever struggled with paying for your car insurance all in one go?
Well a new company called Drivestyle thinks it has the solution.
The latest telematics-powered insurer thinks it can ease the strain by not charging for the full cost of your car insurance policy in advance.
Instead Drivestyle's policies are designed so you only pay for the miles you need cover for in the next few months, with the chance to top-up with bundles of miles later on.
Top-up insurance
When you apply for a quote from Drivestyle, you get several results. These will vary in price depending on the number of 'Guaranteed Miles' the policy covers.
The fewest Guaranteed Miles is set at 5,000 and offers the cheapest premium, but you can get up to 10,000 Guaranteed Miles covered to begin with if you pay more.
Drivestyle encourages you to go for the absolute minimum number of miles you think you will need for the next six months to a year to lower what you have to pay up-front.
[SPOTLIGHT]Whichever mileage you go for, once you wind down to 1,000 Guaranteed Miles from your allowance you will be able to buy bundles of 500-mile top-ups, which are charged at a variable rate. If your Guaranteed Miles fall to 500, Drivestyle will top you up by taking an automatic payment from your account.
The price of top-up mile bundles will be influenced by your driving style. This is where the telematics technology kicks in.
Insurance from Drivestyle relies on a little black box fitted to your car at the start of the policy. It costs £50 for installation.
The telematics technology will collect data on how, where and when you drive, which will alter the price of buying extra miles. So motorway journeys get a thumbs up while urban routes are less favourable. Doing your journeys during the day will lower your premium rather than driving late at night.
Paying for insurance
Normally you have to pay for car insurance up-front to get the cheapest deal.
Some insurers offer a monthly payment plan, but these involve taking out finance to cut the outlay into affordable bite-sized chunks. For more read How to pay for your car insurance
You still have to pay a certain amount up-front with Drivestyle in the form of Guaranteed Miles, but the company encourages you to opt for the least amount of cover at first and to top-up later, meaning you can spread the cost of insurance without finance and influence what you pay.
Drivestyle also offers the choice to spread the smaller up-front payment throughout the year with a rate of 27.3% APR.
Martyne Miller from DriveStyle explained:
"We're saying 'buy the minimum you need, and immediately cut your outlay'. And if somebody chooses to spread the initial 5,000 mile cost, then they're also financing a smaller amount."
Spreading the cost of insurance
I decided to see what sort of immediate saving I could get with Drivestyle compared to my cheapest quote found elsewhere.
Using Drivestyle I got quotes from 5,000 Guaranteed Miles all the way up to 10,000. Here’s what my premiums looked like:
|
Guaranteed Mileage |
Compulsory Excess |
Voluntary Excess |
Total Premium |
|
5,000 |
£120 |
£200 |
£355.24 |
|
6,000 |
£120 |
£200 |
£426.28 |
|
7,000 |
£120 |
£200 |
£497.33 |
|
8,000 |
£120 |
£200 |
£568.37 |
|
9,000 |
£120 |
£200 |
£639.42 |
|
10,000 |
£120 |
£200 |
£710.47 |
The cheapest policy came to £355.24 and I would be allowed to drive 5,000 miles before having to top-up. I tend to drive 10,000 miles in a year so this would be just half the cover I need.
When trying out telematics technology in the past, I have fared rather well so presumably the top-up miles will cost a lot less than the average £70 cost of buying more miles up-front from Drivestyle.
However, I found a cheaper quote of £310.81 by shopping around that would cover me and my annual mileage. With this policy I wouldn’t have to top-up at all.
The same deal from Drivestyle would cost £710.47. Add to that the installation of the tracker at £50 and it doesn’t seem so cheap.
Verdict
Drivestyle is just one of a growing number of telematics insurers that are re-designing the way we think about and pay for car insurance.
We have seen other insurers use the technology to offer cashback for good driving – read more in: Carrot or stick: which makes you a better driver? - or to put in place restrictions, like curfews, that lower premiums. But these policies tend to target younger drivers.
Now with Drivestyle we have a way to avoid paying in advance for a full policy without finance. And it's designed for those between the ages of 25 and 79, so older drivers can start to see how telematics can work in their favour.
I think spreading the cost of insurance by taking a lower Guaranteed Mileage and topping up is a good idea, but only if you're a solid driver and prepared to abide by Drivestyle’s criteria about when and where you drive. Older drivers might not be prepared to sacrifice these sorts of driving freedoms!
I wasn't able to make this style of policy work for me, but it doesn't cost anything to see if you will be better off, so give it a try!
See if you can make a saving with Drivestyle and let us know how you get on in the comment box below.
More on car insurance:
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Cosmetic car insurance: is it worth it?
How to pay for your car insurance
Aviva Drive car insurance app reviewed
The cheapest cars to insure for young drivers