Pay-Per-Mile Car Insurance

Pay-Per-Mile Car InsurancePay-per-mile car insurance is rising in popularity but is it right for you though?

As Americans continue to climb out of the economic morass, many are turning to mass transit options in order to save money on fuel and maintenance costs. And as they drive less, a savvy few are also turning to pay-per-mile car insurance as a clever way to further bump up their budgets and save on car insurance.

Pay-per-mile car insurance is the concept of rather than paying a fixed rate to insure a car, drivers simply pay insurance on the miles they drive. Duh, right? The less they drive, the less they pay. This new method of buying car insurance may not be for every driver but would be good for drivers concerned about their reducing carbon footprint, families on a budget, and infrequent drivers or drivers that consistently drive few miles yearly.

In some cases, the premium is determined after a driver has driven a certain amount of time. In others, rates are typically determined on the usual factors: a driver’s age, driving history, credit rating and where the driver lives. Auto insurance companies would then formulate a per-mile rate. Also, with some companies drivers buy as few as miles as 1,000 at one time. Convenient right?

Depending on what insurance company drivers choose, they would be required to take pictures of their odometer and send them in periodically for the insurance company to calculate their payment. Other companies may install a device that monitors how many miles were driven, speed, and time. In other instances, drivers may have to have a GPS device installed on their car or have a subscription to an in-vehicle security system like On Star. Perhaps one of the best available programs out there is the Snapshot program offered by Progressive which can earn a driver savings of up to 30% when they drive fewer miles and at certain times.

While this new way of insuring vehicles has been around for several years it has had some trouble taking off across the nation. Part of the problem for its failure to launch is that there is no cheap method for insurance companies to track how many miles a consumer drives without more invasive devices offered by GPS devices, for example.

Privacy concerns are another barrier to the wide availability of pay-per-mile because some of the proposed monitoring devices gather much more information than is needed to determine how many miles someone drives. The threat of hackers gaining access to the gathered information is another concern since it can be used to know when homeowners are away from home.

Also, it isn’t available in all 50 states yet because laws in some states require insurers to tell drivers how much their premium will cost before they buy it.

But until pay-per-mile becomes the rage across the Nation, drivers can still save with these Fab Five money-saving tips from AutoInsuranceMonitor.com which is making it its mission to help drivers understand the nuances of car insurance by providing answers to many of the most commonly asked questions regarding polices and coverage. The site also offers an easy place to review quotes from America’s top car insurance providers such AAA, AARP Auto Insurance, Progressive and Nationwide:

  1. Less Driving – Although pay-per-mile isn’t prevalent across the 50 states, drivers still earn discounts for low miles driven yearly. So taking the bus or the neighborhood carpool simultaneously helps save cash and the environment.
  2. Drop CoverageCollision and comprehensive coverage on an older car could be dropped particularly if a driver isn’t driving too many miles.
  3. Pay For A Year – Drivers pay less for car insurance when they buy it yearly instead of through installments.
  4. Multiple Cars – Adding another vehicle to a policy will earn a discount on insurance rates with most insurance companies.
  5. Stay Loyal – Loyalty is for suckers right? But staying true to one company could pay off in the long run as many of the top auto insurance companies offer special deals to drivers that have remained with them for year.