Erik Nelson, general insurance media relations manager for Norwich Union, added that the products can be useful for those who do not want to use their car but need it for certain situations.
"It's a great policy and it rewards you for driving less which has great environmental benefits," he added.
Pay as you drive insurance schemes work through the use of a GPS device in a car.
The system records information on car journeys and transmits it back to a provider, where the company can use the details to calculate a premium and a bill for a consumer.
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