In the past, most auto insurance companies have tried to find different ways to respond to evolving consumer needs.

Consumers all across the country are searching for alternative ways to save some money on auto fuel as gas prices continue to be very unstable. High gas prices combined with paying auto insurance premiums can really put your finances in jeopardy. Insurance companies have responded to the unstable fuel prices by creating a new pay as you go insurance program which does seem to offer some financial relief.

Called Environmental Defense, the program’s purpose is to use it to record a driver’s car mileage. In order to achieve this, there are two proposed methods of operation. The installation of a proprietary odometer that has an embedded cell phone that calls in your mileage to your insurance company from time to time is one way this is done.

The other method used on a regular basis to track mileage, is a GPS device installed in a phone which tracks the travel route you are taking, much like the On Star system does. You may want to find out a little more information on each program before you make a decision on which method is the one for you.

An infringement on their right to privacy, is one objection to the GPS system that some consumers have. The GPS device has certain advantages over the propriety odometer method of tracking mileage, because it not only keeps track of the mileage count, it also pinpoints the right time to travel, the amount of time spent traveling and the route traveled l. It is best to compare your privacy concerns with the benefits of the two methods.  

The Environmental Defense has the idea that a pay as you drive program will save the consumers money and help reduce pollution, because the insurance companies will offer incentives for driving less.One benefit of the pay as you drive program could be a reduction in the number of drivers from the congested streets and highways of the cities, where traffic is now a tremendous problem.

Auto insurance premiums could be controlled more by the drivers who use the pay as you drive programs and this will also help make auto insurance more affordable to them.

It can be very simple to determine how cost effective a pay as you drive program could be. A part of your annual premium rate is charged into a per mile fee; your car is assigned to a group, according to vehicle type, the amount of usage, and your zip code. When a per mile rate has been determined, you may be responsible for paying an upfront fee for your pre-determined mileage.

The amount you will have to pay on auto insurance and whether you will receive a rebate or have to pay more, will be determined by the amount of time you have spent in driving the car.

Some auto insurance policy holders are estimated to perhaps be able to receive a savings of about 25% on their car insurance, if they were to use a pay as you drive program.

If the pay as you drive auto insurance programs can improve our way of life, through less pollution and congestion and lower costing insurance coverage, we need to ask ourselves why it is not more widely used.

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