Could pay-as-you-drive insurance help lower your carbon footprint?

By Tara McCabe ·
Rear view of mother and daughter cycling along a busy street with helmets on.

Around 80% of Aussies are now concerned about the impacts of climate change, that’s according to a 2019 report from The Australia Research Institute.

More recently, news on temporary reductions in emissions during the lockdown and TV programs like ABC’s Fight For Planet A have stoked public interest and demand for permanent solutions.

One thing the TV series looks at is the emissions produced from cars. It’s a concern that is quite rightly expressed too, given that a 2017 report from the Climate Council shows that cars make up roughly half of all transport emissions in Australia.

So if you’re a car owner, what can you do?

#ParkItForThePlanet

While owning an electric vehicle might be the dream for the environmentally conscious Aussie, the current high price point means it isn’t feasible for many of us. The simplest solution right now is to drive your car less, or #ParkItForThePlanet.

This could mean swapping out driving with taking the bus or a train a few times a week. Or, if you are worried about getting on public transport right now, hopping on a bicycle. You could even look up free road safety workshops for cyclists in your area, if your riding is a little rusty.

Pay-as-you-drive car insurance

Now the best part about using your car less is that not only will you be reducing your carbon footprint, but you could also pay less in car insurance.

This is where pay-as-you-drive insurance comes in. As the name suggests, this type of car insurance is designed to benefit those who don’t drive much. It is often called a pay per kilometre plan and as a number of insurers suggest, is suitable for anyone who drives less than around 15,000 km per year.

Insurers who offer pay per km or pay as you drive insurance include:

How does it work?

Pay-as-you-drive insurance is pretty much just normal car insurance with a discount for driving less. Most are comprehensive policies, so will include all the usual cover you would expect.

Different insurers will measure your distance driven in different ways. For instance, Huddle will take an odometer reading from you when you sign up to the policy and another at the end of the year, while UbiCar uses the UbiCar Device to track the number of kilometres you drive each month.

So, there are few different options out there and pay-as-you-drive is growing in popularity every year. 

Head to Mozo’s compare car insurance page for more options, or check out the policies on offer below to see if you could be getting a better deal for your wheels.

Compare car insurance - page last updated September 26, 2020

Search promoted car insurance below. Advertiser disclosure.

  • Comprehensive Car Insurance

    Monthly premiums
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    Monthly premiums
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  • Comprehensive Car Insurance

    Monthly premiums
    Calendar icon
    Yes Costs Extra
    Choice of repairer
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    Optional Extra
    Choice of excess
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    $400 - $2,500
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*Any information provided on this page should be considered a summary and general advice only. All information should be verified before purchase via the relevant Product Disclosure Statement (PDS).

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Tara McCabe
Tara McCabe
Money writer

Tara McCabe writes across all areas of personal finance here at Mozo from banking through to insurance. Tara is expert at practical money tips, showing readers ways to live richer and be socially conscious while doing it. She earned a BA (Hons) in English Literature from Canterbury Christ Church University.