The premiums you pay on your auto insurance are usually based on your age, gender, and where you live.
Pay As You Drive insurance however is different. It’s based on the number of miles you drive. Drive fewer miles, pay lower premiums.
The obvious advantage of Pay As You Drive, then, is cost.
Since Pay As You Drive premiums are computed on the basis of how many miles the vehicle is driven, it is extremely easy to reduce the monthly insurance bill. Simply reduce the number of miles driven. Not only does this save money on the insurance bill, it also means less on gas and maintenance and repair.
The fewer miles driven, the longer the vehicle lasts. It may be possible to keep the vehicle long after that last car payment is made, and in our tough economy, who can’t find things to do with the money that otherwise would be spent on a car payment?
The less obvious advantage of Pay As You Drive coverage is that you can tailor your program to your specific driving needs. Premiums under these plans are either computed on the basis of miles driven, or on the basis of hours driven.
You can choose a Pay As You Drive policy that focuses on total miles, or total hours in a specific time period, such as six months. Pay As You Drive coverage offers you the flexibility and freedom you need to choose exactly the coverage you need, and to get it at a lower cost as you economize.
Because Pay As You Drive incentives driving less, it makes it less likely you will get yourself into an accident. Low-mileage drivers are usually more focused and careful behind the wheel, too.
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Mileage monitoring is required with Pay As You Drive insurance, but there are plenty of options for drivers. You can have certified odometer readings, much like you do when you have your vehicle’s safety inspection. Or you can have a GPS based monitor installed in your vehicle, or you can simply have the computer data uploaded from your vehicle.
Since only periodic mileage readings are needed to track the mileage for Pay As You Drive insurance, the cost associated with mileage monitoring will most likely be offset by the money you save in insurance premiums.
A report from the Brookings Institution found that two-thirds of U.S. households would save an average of $270 a year with Pay As You Drive insurance. In the current tight economy, that is great news.
And not only does Pay As You Go save you money, it helps you save the environment. Fewer miles driven means fewer vehicles on the road. Fewer vehicles on the road means fewer greenhouse gas emissions, not mention less congestion, fewer traffic jams, and less time wasted sitting in traffic.
There are many advantages to Pay As You Drive. See or call your insurance agent to get more detailed information about a Pay As You Drive policy that meets all your insurance needs.
Tom Martens is the content syndication coordinator for Carinsurancesa.co.za. South Arica?s leading car insurance portal.
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