AUTO INSURANCE ARTICLE
Discount Auto Insurance – Pay as You Drive Concept
By: letter_womanToday, we can pay as we talk in a mobile phone plan, so why not pay as we drive for auto insurance? It sounds a good idea, but would ‘auto insurance pay as you drive’ work you?
The average miles driven in the U.S. is between 15,000 and 20,000 miles per year and most auto insurance companies use the said average to set the rate. Policy holders with nearly 10,000 miles per year of any of their vehicles would end-up paying more on auto insurance premium.
The pay as you drive concept is so simple. Basically if you do not drive your car more often, you will not pay high insurance premium. However, if you frequently use your car, you will pay a much higher premium each month.
Here are some of the ways to lessen your miles driven. Consider joining car pooling going to work or use public transport. The ‘pay as you drive auto insurance’ is literally ‘a pay as you go’ auto insurance. The more miles you driven each year, the higher auto insurance rate you may get estimated by your car insurance provider.
Auto Insurance Companies set the average miles driven for each type of vehicle. Therefore consider those vehicles that are listed by your insurance company. If you already consider the pay as you drive auto insurance —remember that it could then be broken down into cents per mile and buy a set number of miles that will cover you during this period.
People behind this concept think that if consumers support this program it will give more benefits and helpful ways to lower the cost of premium on auto insurance. Some of these benefits include lower gas consumption, less air pollution, low premium costs and others.
The pay as you drive auto insurance is a brilliant idea most especially for those who do not frequently use their vehicle. It is also ideal for those consumers who try to find environment saving and cost saving alternatives. Some institutions including Conservations Law Foundation, Environmental Defense and the U.S. Protection Agency are working together to offer deep discounts for low mileage consumers.
In mid 2004, General Motors Acceptance Corporation or GMAC and OnStar, began offering the pay as you drive or PAYD rates to some states. According to GMAC, mileage is one of the primary key to determine the rate. Historically, it’s difficult to track accurately because factors were estimates. With the use of OnStar system, they are able to measure the actual miles driven and rates which are ties specifically with actual miles driven of every individual.
The OnStar vehicle’s odometer system reports and verifies the mileage at the beginning and end of the policy term. Every policy holders who drive less than the specified annual miles driven can receive substantial discounts on auto insurance. With GMAC Auto Insurance, policy holders can save up to 25% –driving 10,000 miles or less in a year and nearly 40% if they drive under 5,000 miles or more. Therefore, if you already retired, work from home, or commute by mass transit and wants to save more on car insurance, low mileage discount is certainly something to look into.