Norwich Union withdraws 'Pay as you Drive' scheme

Commenting on Norwich Union pulling its 'Pay as you Drive' scheme, Peter Gerrard, head of insurance research at moneysupermarket.com, said: "This is a blow for younger drivers who were prepared to curb their driving habits for cheaper car insurance.

"While the Pay As You Drive scheme was innovative, it seems too many drivers gave the thumbs down to having big-brother-style black boxes fitted in their cars. At the time of launch two years ago, we foresaw take up would be slow. Our research showed that fewer than one in ten motorists would be prepared to have a monitoring device fitted even if it reduced their premiums by 30 per cent, while 27 per cent said they wouldn't contemplate installing one in their car, no matter how much it could save them.

"Car insurance can be very expensive for young drivers, as our table below indicates. The average car insurance premium for a man in his twenties is £370 - £108 dearer than the £262 average for a man in his thirties."

There are other ways to cut your insurance costs:

Shop around - The Association of British Insurers says you can save 35 per cent by comparing as few as five insurance providers.

Buy online - Many car insurance providers offer discounts to customers that buy online.

Mileage limit - Consider a mileage limit or to only drive at certain hours of the day. More Than offers a pay-as-you-go scheme which reduces premiums by around 40 per cent for those under 25 who drive only during off-peak hours.

Car security - Make sure you have an alarm and immobiliser.

Drive a car with a smaller engine - A newer, more reliable car that is less likely to be used by 'boy racers' will have a cheaper premium.