You can pay as you talk with a cell phone plan, so why not pay as you drive auto assurance? It sounds like a good idea; but would pay as you drive auto assurance work for you?
The idea behind pay as you drive auto assurance is simple. Basically its this- if you do not drive very much, you will not pay high assurance premiums. Advocates for this type of assurance policy think that there are many merits to this type of program.
What if you car pool to work, or take public transit? You are not using your car very much so why are you paying high premiums. With a pay as you drive auto assurance premiums you would be able to quite literally pay as you go. Another situation where this plan would be of benefit is that of many retirees who have winter homes in temperate climates, the 'snowbirds' living in Florida or Arizona six months of the year and six months in New York or Toronto for example.
Essentially the assurance companies would set an average driving amount for each car type. It could then be broken down into a cents per mile basis. If you wanted to us the pay as you drive auto assurance system you could purchase a set number of miles and you would be covered for assurance during this period.
Pay as you drive auto assurance is an excellent idea for those individuals who do not use their car very much or try to find cost saving methods or environment saving alternatives. Currently this type of program is not yet available, but there are supporters in many states who are hoping to change that soon.
Groups including Environmental Defense, the Conservation Law Foundation and even the U.S. Environmental Protection Agency are working to organize a national cooperative that would work with assurance companies to offer deep discounts for low-mileage drivers; halfway a step toward PAYD (Pay As You Drive) assurance.
General Motors and On-Star Offers PAYD Rates. In mid-2004 General Motors Acceptance Corporation (GMAC) assurance began offering mileage-based discounts to OnStar subscribers located in some states. The OnStar system reports a vehicle's odometer readings at the beginning and end of the policy term to verify mileage. Motorist who drive less than specified annual mileage can receive assurance premium discounts of up to 40%.
PAYD programs are also currently available in Israel, South Africa and Holland. PAYD is gaining momentum, and will be coming to your area soon.
About the Author
D.Demetre is a contributing author at Online-Car-assurance.us, where you can get free cheap auto assurance quotes