In past years, most auto insurance companies have tried to find different ways to respond to changing consumer needs.
Since fuel prices are constantly on the rise or decline, consumers in the U.S. are trying to save money at the gas pump. Paying auto insurance in as well as dealing with high gas prices puts the hurt on finances.
A new insurance program offered by auto insurers seeking to offer the consumers cheap auto insurance quotes as a way of relieving financial strains is called the pay-go or the pay-as-you-drive program.
The pay as you go program was proposed by the Environmental Defense, and its purpose is to monitor and keep a record of an individual’s automobile mileage. Two ways have been suggested for making this work. 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.
One other option for tracking your travel route and reporting the mileage involves adding a GPS device into a phone in the car, which would work like the On Star system. 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.
Infingements on their right to privacy is one objection to the GPS system that many consumers have voiced. The GPS system does have some advantages over the proprietary odometer method of tracking mileage because it not only calculates travel mileage but also helps you find the quickest and easiest route to travel. You must weigh your privacy concerns against the potential benefits of each of the systems.
The insurance companies are hoping that by providing financial incentive for driving less, the Environmental Defense believes that its pay-go program will eventually save the consumers some money as well as help to reduce pollution. The pay as you drive program could also lower the traffic congestion that floods urban streets by reducing the number of drivers on the road.
Pay-go programs will help make auto insurance more affordable for drivers by letting them have more control over their auto insurance premiums.
If you’re interested in learning what savings are available, the pay-go program makes this simple. A part of your annual premium rate is charged into a per mile fee by assigning your car to a group, according to vehicle type and the amount of usage, as well as your residential zip code. You could be responsible for paying an upfront fee for your pre-determined mileage when a per mile rate is estimated.
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 the car.
It has been estimated that this type of program could end up saving some policyholders up to 25% on their insurance costs.
If the pay as you drive programs can save you money and reduce pollution and congested driving conditions, it could easily be the big wave of the future.
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