Since fuel prices are constantly on the rise or decline, consumers in the U.S. are trying to save money at the gas pump. The cost of auto insurance plus the unstable cost of gasoline has quite a strangle hold on many Americans’ finances.
One move made by insurers is an innovative insurance program, known as the pay-as-you-drive program, which may be able to provide some cheap auto insurance quotes to drivers.
It is interesting to note that the purpose of the program, officially organized by the Environmental Defense, was to record the mileage on a person’s vehicle. In order to make this happen, two proposed methods are under consideration. The first method involves adding a proprietary odometer that includes an embedded cell phone that calls in to update your car’s mileage with your auto insurer.
Another method under consideration would function like ON Star, using a GPS device to monitor mileage as well as the travel route. You may want to spend some time researching each program to get more details before you make a decision on which method is the one for you.
Understandably, many consumers feel that the GPS system interferes with their right to privacy, so they do prefer not to use such a system for this reason. Using the GPS method has its advantages, however, as it not only monitors the mileage but it also advises you about the best time to travel and the easiest route to follow. You must weigh your privacy concerns against the potential benefits of each of the systems.
The Environmental Defense believes that a pay-go or a pay-as-you-drive program will save consumers money in the course of time, and help cut down pollution because the insurance companies will offer financial incentives for driving less. Such pioneering insurance programs will help to eliminate congestion in the overcrowded cities since there will be fewer drivers on the streets.
Pay-go programs will help make auto insurance more affordable for drivers by letting them have more control over their auto insurance premiums.
It is relatively simple to decide how much can be saved by a pay-as-you-drive program. This type of program will charge part of your annual premium rate by accessing a per mile fee that is determined by the an assigned pool of drivers based on frequency of use, model of vehicle, and zip code. When a per mile rate has been determined, you may be required to pay a fee up front for your pre-determined mileage.
The determining factor of whether you’re eligible for a rebate or if you’ll have to pay more for your insurance is based on time spend driving your vehicle.
There have been calculations that put the savings to policyholders to around 25% on auto insurance coverage using such programs.
If you can actually save money on the cost of auto insurance and improve the environment and cut down on the amount of congestion on our highways, it could be one of the best ways to go.
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