Car Insurance By The Hour: Cuvva Offers Pay As You Use Service

Cuvva, a Scottish start-up, is set to release a type of car insurance this April aimed toward those who use their cars infrequently. It will be accessible through their mobile app and function like a “pay as you go” system. It is, however, only offered in the United Kingdom and could look to geographically expand before other companies latch onto this business model and offer it in other major metropolises.

Cuvva will require people to pay a £ 10- £ 30 monthly subscription for their services and will then charge another fee of £1.70 every hour someone wants their car to be insured. The monthly description price depends on car model and location. Cuvva’s hourly insurance will allow people to earn a no claim discount each year.

The UK Department for Transport and the Drive and Vehicle Licensing Agency (DVLA) claim there are 6 million cars in the UK that are driven less than 4,000 miles a year. The people who own these cars often have to pay high yearly premiums due to their location in a downtown section of a city, according to DVLA. Those who fully insure their cars and drive them less than 4,000 miles a year are mostly paying to have it sit on the side of a road.

“It was ridiculous that I couldn’t borrow a car for an hour, because of the difficulty of getting short-term cover,” Cuvva founder Freddy Macnamara said in a statement. “I could order of a Deliveroo to my house, but i couldn’t buy insurance for a short period quickly. We realised that we could use the same mechanism to save infrequent drivers a huge amount of money. Saving £500 to £1000 a year on your car insurance is life-changing. Everyone can think of someone who will benefit from that. ”

Cuvva is the only apparent company who has found a place in providing hourly car insurance, but other insurance companies will likely follow suit before long. The option to pay a small fee every month to be able insure a car by the hour is a logical solution to those who don’t often drive.