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Is Pay-As-You-Go Insurance Right For You?

Close up to an odometer with random numbers to depict whether the

If you’re still looking for cheap car insurance, you may want to consider Pay-As-You-Go Insurance. This is an innovative, money-saving form of insurance that auto insurance companies have adopted for those who don’t drive too much. This insurance plan is also known as a discount mileage plan, where the rates are adjusted based on the distance you drive.

Basically, if you drive less, you’ll pay less on your auto insurance premium.

There are two ways that an insurance company works with you to confirm low mileage; you can either plug in a device to your car to track the distance driven or use your active subscription of a built-in telematics service such as OnStar.

•    Device Based Pay-As-You-Go Insurance You’ll need to install this device into your car, which can be disturbing for some people. You may need to detach it and give it to your auto insurance agent periodically for analysis. Something to consider about using this device is that it could track not only distance, but also your speed, braking pattern, time of day you were driving, etc. If you don’t want this information tracked, talk to your insurance agent about how to use this device and protect your privacy at the same time, too.

•    Telematics Based Pay-As-You-Go Insurance If you have OnStar or another similar telematics service built into your car, you can use this method for Pay-As-You-Go Auto Insurance. Your paid subscription will automatically transmit the necessary information to your auto insurance company; there is nothing else that you would be required to do to hold this insurance policy.

Pay-As-You-Go Insurance isn’t the best way to go for everybody, even if getting cheap car insurance is your main goal in finding auto insurance. It can feel make you feel uneasy to have an auto insurance company knowing your driving habits and have your premiums based on what they see.

If you go over the speed limit, it can also count as dangerous driving and work against you. This plan is best for someone who doesn’t plan on driving too much and doesn’t mind being open to an auto insurance company having this much detail about their driving habits.

On the bright side, if doesn’t hurt to have this program if you just want to save money this year. You won’t get penalized for having driven more than the threshold amount, typically 15,000 miles annually. But, you will get discounts on your premium for having driven less. After all, you’re looking for cheap car insurance right?

If you’re driving much less than the given distance limit, you could be saving up to 50% on your auto insurance premium, or more. Typically, traditional auto insurance companies don’t offer this program and if they do, it’s not advertised as much. Ask your insurance agent if there is a mileage discount program that you can enroll in. The Pay-As-You-Go Insurance program also encourages drivers to drive less, in other words, to Go Green! You’ll be helping to reduce vehicle emissions and contributing to a healthier earth all while saving money at the same time! is this auto insurance program what you’re looking for?

What do you think about Pay-As-You-Go Insurance?  Feel free to share your thoughts in the comment section below.

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