According to state law, we are required to hold auto insurance as licensed drivers. With gas prices higher than they have ever been before, many people are looking towards other means of transportation to cut down on their costs, such as taking a bus, train, riding your bike, or even walking. However, many people don’t want to give up the convenience of having a car.
Is pay per mile auto insurance right for you?
When getting a new auto insurance quote, you may be able to save a little bit of money since you aren’t on the road as much, but you honestly won’t save all that much. Paying for full blown car insurance coverage just doesn’t make sense for these people that don’t drive nearly as much as they once did. But since it is required by law, cutting out auto insurance completely from your budget is not an option.
Many people are curious as to how insurance rates are determined. Your best friend drives much more than you do, but you guys both pay the same amount for auto insurance. This doesn’t seem quite fair, does it? This led the auto insurance companies to come up with a new way to offer coverage for those that want to keep their cars handy for special occasions.
What they came up with was a pay-per-mile or pay-as-you-drive plan that largely charges you only for how much you drive. This form of auto insurance is definitely in its infancy, but is already showing great promise. Some people are already saving 25%-40% on their auto insurance premiums. This is perfect for those that care about the environment. Eco-friendly drivers can now drive less, and save even more money than they already are buy cutting down on gas consumption. Share this article with your friends – this added incentive may be able to convince them to cut down on how much they drive.
However, if you have no other choice but to commute to work or school via car, these pay-per-mile plans probably aren’t for you. Unless you are keeping your driving to a minimum, often times you will end up paying more. You need to weigh the pros and cons of getting this type of insurance coverage. After all, you don’t want the insurance company getting the better end of the bargain. The rule of thumb is that if you drive less than 500 miles per month, you should definitely consider pay per mile insurance or even one day auto insurance. If you drive more than 1000 miles per month, you should stick with a longer period policy. Anything between that is up to you, get in touch with an insurance company to see if you qualify for this type of plan.
So, is pay-per-mile auto insurance for you? There is only one way to find out, and that is by getting a car insurance quote. There you will be able to compare the rates of pay-per-mile and standard policies to see if they will actually save you money in the long run. Keep in mind, not all states have adopted pay as you drive auto insurance just yet. As these program grow in popularity, more auto insurance companies are likely to adapt them to other states.
