There are many people for whom this type of cover will prove invaluable:
The elderly. Elderly drivers who only use their car for short journeys, especially during off-peak hours during the day, are considered to be low risk anyway by many insurance companies. Pay by the mile car insurance is likely to benefit them, saving them a considerable amount of money per year.
The young. Young driver policies can be exceedingly expensive - often the first year's insurance will cost more than the car did to buy - and adding a young driver as a named driver on a parent's policy often doesn't allow the young driver to accumulate a no claims discount of their own. With pay by the mile insurance, they are able to build their own no claims discount but at a lower cost due to a reduced time spent behind the wheel. This type of policy may also suit students who are only likely to use their car at weekends and during school holidays.
Home workers. People who do not need to commute into an office and therefore only use their car sporadically, for shopping trips, the school run or holidays, can often benefit from a pay as you go form of car insurance as their car will spend a lot of its time parked up safely on the drive making them a low risk for the insurance company.