Pay You Go Auto Insurance

Pay As You Go Auto Insurance provides you with accurate mileage for the miles driven for a certain period. Pay-as-you-go car insurance plans can save low-mileage drivers hundreds of dollars annually.

For decades, many drivers who rarely or never drove had to pay their full premiums and, if they were lucky, received a small discount for being considered low-mileage drivers. Even so, they paid significantly more proportionally than those who drove a lot.

Every day, we hear how technology is changing the world around us, supposedly making our lives more efficient and productive. The digital age has generated countless inventions, and the insurance market is no exception. This becomes evident when technology is used to determine your mileage and calculate your premium accordingly.

Insurers have Made Big Profits on Low-Mileage Drivers

Large insurers ended up with big profits year after year, mainly due to safe motorists who didn’t drive much. Car insurance carriers marketed to these consumers with an endless barrage of television and online ads claiming to save them time and money. Has anyone ever thought about the costs of those advertisements? Well, those costs get added to your insurance bill.

The idea behind pay-as-you-drive auto insurance is to allow the driver to only pay for miles driven. This option seems fair enough, and if you don’t drive too much, it could be a smart choice for those on a tight budget. 

Let’s look at some real ways to save on pay-as-you-go car insurance, which, although it’s starting to become more popular, isn’t yet widespread.

New Technology Tracks Driver Mileage

Thanks to technological advances, auto insurers can track the miles you drive and the speed. This type of automotive tracking, often called telematics, uses technology to gather information about your vehicle and driving behavior.

In short, the safer driver you are and the fewer miles you drive each month, the more you can save.

For example, let’s say you live only 5 miles from work and don’t drive much on weekends. You travel a total of about 500 miles per month and rarely drive aggressively or exceed the speed limit. In this scenario, you could save $600 or more per year on full coverage. To compare pay-as-you-go car insurance plans and get car insurance under $100 a month, enter your zip code to get started.  

What Exactly Does the Device Monitor?

Three primary indicators are monitored on your vehicle:

1. Mileage: The number of miles you drive within a specific period, typically measured monthly.
2. Speed: Instances of high speed, such as exceeding 80 mph, which may be classified as reckless driving and lead to significantly higher insurance premiums.
3. Braking: The frequency and intensity of hard braking. Sudden stops are considered a sign of aggressive or reckless driving.

The Growing Acceptance of Telematics

Telematics devices, which monitor driving behavior, are becoming increasingly mainstream. While initially perceived as an intrusion on privacy, this technology is now more widely accepted for the significant benefits it offers to both drivers and insurers.

A recent survey by the Mobility Consumer Pulse (Arval) found that a majority of drivers (54%) are now willing to share their driving data for a tangible benefit, such as lower insurance costs. This shift in perception is driven by one key factor: proven savings. Usage-based insurance (UBI) programs can save safe drivers an average of 10-30% on their premiums, according to the Insurance Information Institute.

A Crucial Tool for Parents of Teen Drivers

One group of consumers that have welcomed the idea of vehicle monitoring devices is parents with teenage drivers.

For worried parents, a device that monitors speed, braking, and distraction provides invaluable peace of mind. With distracted driving—including phone use—being a leading cause of fatalities for young drivers, telematics devices offer a way to encourage safer habits. These devices provide concrete feedback that can positively change driving behavior, potentially saving lives.

Furthermore, given that car insurance premiums for teens are consistently among the highest, enrolling in a usage-based insurance program is a practical strategy to manage these costs while promoting safety.

Is a Usage-Based Policy Right for You?

First, ask yourself if you feel okay with recording your driving with a monitoring device. If the answer is yes, you need to be honest with yourself and assess whether or not you are a safe driver and do not speed. 

If you feel comfortable with having the technology monitoring your car and are a safe driver at all times, then you are good to go. A usage-based policy can save up to 20% or more on car insurance. If you qualify for other discounts, such as military service, you could be looking at some severe insurance savings.

Which Car Insurance Companies Offer Pay-As-You-Go Auto Insurance?

Pay-as-you-go auto insurance, also known as usage-based insurance (UBI), is now widely offered by many major insurers. Companies such as Allstate (Drivewise), State Farm (Drive Safe & Save), and Nationwide (SmartMiles) have prominent programs. Progressive’s Snapshot® program is one of the most well-known, having been heavily promoted in advertising for years.

If you are considering this type of policy, it is essential to compare quotes from multiple companies. A great first step is to research cheap car insurance options online to see what’s available.

Pay You Go Car Insurance Rates

How much money can a person expect to save for having one of these devices hooked to their car? How much can a person save by losing just a bit of privacy? The answer varies from company to company, but can be as high as 40% based on the most recent policy data. If you paid $2,000 for your auto insurance coverage last year, that could mean saving as much as $800 per year. What must you los,e except your high-cost insurance bill if you are a safe, responsible driver?

Available Auto Insurance Discounts

Insurance carriers have multiple discounts available, and you should be aware of all of them. Some of the popular ones include:

• Safe Driver
• Low Mileage
• Good Student (GPA of 3.0 or higher) 
• Teacher
• Military and Veteran discounts
• Senior Citizen 
• Bundling Home and Auto Insurance
• Multi-Vehicle Discounts 

The best way to save with pay-as-you-go auto insurance is to compare multiple quotes online. The best deals on car insurance are almost always found online. Get started and comparison shop at least five quotes from several carriers that offer pay-as-you-drive auto insurance plans. 

You can get a quote from the comfort of your home in about four or five minutes. You can even use your smartphone to check rates. Let the insurance companies fight for your business and compare the best pay-as-you-go auto insurance plans. The quote is free, so what are you waiting for?

Is Pay-As-You-Go Insurance a Good Fit for You?

Pay-As-You-Go insurance could be a smart way to save if you don’t drive much or just want a policy that truly reflects how you use your car. Instead of paying a flat rate, your costs are based on how much you actually drive—meaning you’re not overpaying for coverage you don’t need.

Looking to cut down on insurance costs without losing essential protection? This type of policy might be the perfect fit. Take a look at your options and find a provider that works best for your driving habits and budget. Compare quotes now and select the best option for you.