In this paper, we provide an extensive summary of a field experiment we have recently conducted on the behavioural effects of pay-as-you-drive (PAYD) vehicle insurance (Bolderdijk et al., 2011a). We start with a review of the rationale for PAYD schemes from a behavioural science perspective. Next, we describe the design of our study, and discuss and elaborate on the main empirical findings. Based on this, we present practical guidelines for policy makers and insurance companies aiming to introduce PAYD schemes as a tool to reduce crash risk, improve traffic safety, and reduce the negative environmental impacts of car use.