In past years, most auto insurance companies have tried to find different ways to respond to changing consumer needs.
Finding a way to save money on gas for their vehicles is prompting many consumers across the country to find creative ways to save a few bucks at the pump. The cost of auto insurance plus the unstable cost of gasoline has quite a strangle hold on many Americans’ finances.
Insurance companies responded to this situation by establishing a new insurance program which is known as the pay-as-you-drive program or pay-go for short, that could provide policyholders some financial relief by way of cheap auto insurance quotes.
The pay as you go program was proposed by the Environmental Defense, and its purpose is to monitor and keep a record of an individual’s automobile mileage. Two approaches have been proposed to achieve this end. One method of doing this is accomplished by installing a proprietary odometer with a specialized cell phone that would report the car’s mileage to the insurance company.
The other method for tracking car mileage, is a GPS device installed via cell phone which tracks the travel route you are taking; it is much like the On Star system. If you are indecisive on which method will be best for you, maybe you need to learn more about them.
Understandably, many consumers feel that the GPS system interferes with their right to privacy, so they do prefer not to use such a system for this reason. The GPS system does have some advantages over the proprietary odometer method of tracking mileage because it not only calculates travel mileage but also helps you find the quickest and easiest route to travel. What you must do is decide where your privacy concerns rate against potential benefits of each method.
The insurance companies are hoping that by providing financial incentive for driving less, the Environmental Defense believes that its pay-go program will eventually save the consumers some money as well as help to reduce pollution. Such pioneering insurance programs will help to eliminate congestion in the overcrowded cities since there will be fewer drivers on the streets.
The pay as you drive insurance program allow companies an opportunity to make auto insurance more reasonable by giving the consumers more control over their auto insurance premiums.
It is relatively simple to decide how much can be saved by a pay-as-you-drive program. The pay-as-you-drive program charges part of your annual premium rate, into a per mile fee and your vehicle is assigned to a group in based on vehicle type, frequency of use, and zip code. You could be responsible for paying an upfront fee for your pre-determined mileage when a per mile rate is estimated.
The amount of time you will spend behind the wheel is what determines whether or not you will receive a rebate or pay more on your insurance premiums.
There have been suggestions that savings may reach up to twenty-five percent for some policyholders who use these kinds of pay-go programs.
If the pay as you drive auto insurance programs can improve our way of life, through less pollution and congestion and lower costing insurance coverage, we need to ask ourselves why it is not more widely used.
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