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Norwich Union has urged drivers who do not use their cars a great amount, such as students who do not drive regularly while at university, to look at their Pay As You Drive scheme.
The insurance company has said that the service benefits people who only drive 8,000 or so miles a year and has proved to be very popular.
Erik Nelsen, a spokesperson for Norwich Union, said: "Most insurers will assume you're driving 10,000 to 12,000 miles per year. If you're driving more than that, you need to let your insurer know. But if you're driving less than that, you can use "Pay As You Drive".
He added that the scheme uses a GPS box in your vehicle that will "track the road you're on, the time of the day you're using your can and how many miles you're driving".
The company said that the information gathered from these GPS boxes allows them to work out a premium and because it has more information it can be more accurate when underwriting drivers.
Described as similar to the pay-as-you-go scheme used on mobile phones, the car insurance scheme is priced based on what the company knows on the risk on the road.
According to Norwich Union, the Pay As You Drive scheme can save users up to 30 per cent on their car insurance if they drive less than 6,000 miles a year.
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