How Can You Pay Auto Insurance As You Go

By Author: Alisdair Cosgrove
Total Articles: 184
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What many of the auto insurance companies have looked for over the years is some way to respond to the changing needs of consumers. As gas prices continue to soar through the roof, all across the country consumers are desperately looking for ways to save money when fueling their cars. Our finances are now tightly bound by many consumer goods, and among them is the soaring price of gasoline and the costs involved with paying auto insurance. Insurance companies have responded by creating a new insurance program known as a pay as you drive program that could provide policy holders some financial relief.

The program is officially called Environmental Defense and the purpose of the program is to track an individual's car mileage. There are two proposed ways to accomplish this. One method is done by installing a proprietary odometer that contains an embedded cell phone that periodically calls in your mileage to your insurance company.

The other often used method of tracking mileage, is a GPS device installed in a phone in your car to track the travel route you are taking, much like the On Star system does. If ...
... you are indecisive on which method will be for you, maybe you need a bit more information.

An imposition on their right to privacy, is one objection to the GPS system that some consumers have. Using the GPS method has its advantages, however, as it not only keeps track of the mileage but it also advises the time to travel and the route to follow. What you need to do is weigh your privacy concerns against the possible benefits of the method.

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

Drivers could gain more control over their auto insurance premiums through the pay as you drive programs and thus making auto insurance more affordable.

It can be simple to determine how cost effective a pay as you drive program will be. A part of your annual premium rate would be charged into a per mile fee by assigning your car to a group, according to vehicle type and usage and your zip code. When your per mile rate has been determined you could have to pay an upfront fee for your pre-determined mileage. The amount of time you spend driving is what determines whether you will receive a rebate or pay more.

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 our futures can be improved through the pay as you drive programs cutting the cost of insurance and relieving the congestion and pollution on our highways, it will be wonderful.
Alisdair Cosgrove has been writing personal finance articles for many years and can find more of his work at the UK

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