But NU's 'pay as you drive' scheme could cut youngsters' premiums by 30% overall

Young drivers face punitive insurance premiums for driving late at night, under Norwich Union's (NU) new 'pay as you drive' pilot.

But overall the scheme could save young drivers up to 30%, claimed NU.

Under the scheme, 18- to 21-year olds driving at night will face dramatically higher rates than other drivers.

The scheme will price drivers according to normal rating factors such as postcode, car and gender, but then charge on a per-mile basis. Drivers will pay a dual tariff with premiums expected to work from around 6p per mile between 6am and 11pm, and a flat rate of £1 per mile at other times.

A spokeswoman for NU estimated that normal policies for young drivers worked out at around 10p per mile.

NU marketing director Bridget McIntyre said: "We looked at government statistics on age, time of day and accidents and realised there was a problem between 11pm and 6am."

The pilot will run to 1,500 cars and will be launched exclusively through NU Direct. NU estimates the scheme could save young motorists up to 30% on the cost of premiums. There will be a £199 initial cost for the installation of the 'black box' telematic device.

McIntyre said: "We are very proud to be involved in a process that could reduce accidents. We are trying to encourage people to drive more safely. We always said with 'pay as you drive' that if there was a rating factor that produced a 10 times difference in rating it would work."

NU is currently running a nationwide 'pay as you drive' pilot involving 5,000 drivers of all age ranges.