By June 16, 2007 0 Comments Read More →

Pay per mile car insurance.

There are a couple of ways to lower your car insurance rates if you drive less than the average road demon. One of these ways, of course, is by getting a low mileage discount, something that’s offered at many auto insurance agencies that charges you lower rates if your yearly mileage comes in at somewhere under 5,000. Another way is to get pay by the mile car insurance, which is a great idea if you don’t quite fit into the low mileage discount bracket, but you still don’t use a lot of mileage.

This insurance program is a new one, and many companies are still just thinking about offering it, so it might be harder than usual to find a company that does offer it. Still, it’s worth it. It links your payments to the miles that you drive instead of the date you drive them by, which makes a whole lot of sense, doesn’t it? People who drive less often shouldn’t need to pay as much as others, since they’re at risk less often.

According to the Environmental Defense Organization, this program would protect the environment and reduce traffic problems, at the same time as reducing car insurance rates. It also gives drivers a chance to control their own policies, and offers to lessen the burden on lower income drivers.

So, how does it work? One way would be to install an odometer equipped with a ‘cell phone’, which would call up your insurance company and report your mileage. Another way, which some people see as a violation of privacy, would be to install an OnStar GPS system and have it report your actual routes to the agency. If that doesn’t bother you, though, the GPS is more accurate and more likely to get you better rates.

To get into this program, your car would be put into its rate group and the company would have to figure out what the per mile rate should be. Then, you would pay an upfront fee based on the expected amount of mileage you would drive. At the end of the month, if you drove less you would get a rebate, and more you would pay the rest out.

Right now this is only available in certain areas, through two types of programs. One is through OnStar, and offers up to a 40% discount for drivers GM vehicles that have OnStar and have driven less than 15,000 miles a year, and it’s available in Arizona, Pennsylvania, Indiana, and Illinois.

The other program, in Minnesota, uses a sensor attached to the car’s diagnostics and can save the user up to 25% on their rates. This is only available for cars 1996 or older.

Cheers,

Fashun Guadarrama.

Posted in: Auto Insurance

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