The insurer officially launched the scheme to UK motorists in October last year after piloting the system for four years.

NU launched two new Pay As You Drive insurance policies, one for motorists aged 24-65 and another for young drivers aged 18-23. Motorists can get a quote and purchase a policy on the insurer's Web site.

Customers who sign up to the scheme will receive monthly bills based on car usage, including time of day, type of road, and mileage. Itemised billing will be available with the premiums for each journey calculated and totalled.

Iain Napier, director of Pay As You Drive insurance at NU says the scheme offers motorists greater choice, control and flexibility in their motor premiums.

"We have received terrific feedback and take-up of the policy since we launched three months ago. Buying online is just the latest step for Pay As You Drive insurance," he adds.

However research released by personal finance site moneysupermarket.com last year found that over a quarter of UK drivers (27%) would refuse to have a 'black box' tracking device fitted to their cars, even if it dramatically reduce insurance costs.