Pay As You Go Insurance Defends The Environment.

Some way to save money on gas for their auto, is what consumers all across the country are desperately seeking in spite of the unstable fuel prices we continually face.
The cost of auto insurance plus the unstable cost of gasoline for our cars has quite a strangle hold on our finances. A new insurance program some insurance companies have created to offer the consumers, is a pay as you drive program which may offer them a small amount of financial relief.

This program is officially called Environmental Defense, and the original purpose of the program is to track an individual's car mileage.


In order to accomplish this, there are two proposed methods of operation. The installation of a proprietary odometer that has an embedded cell phone that calls in your mileage to your insurance company from time to time is one way this is done.

The other method to track your mileage involves installing a GPS device into a phone in your car, like the On Star system, which reveals your actual travel route. A little more information may be most helpful when you are trying to make a clear decision on the method that is right for you.

An infringement on their right to privacy, is one objection to the GPS system that some consumers have. Using the GPS method has its advantages, however, as it not only keeps track of the mileage but it also advises the best time to travel and the easiest route to follow. So, you need to weigh your privacy concerns against the potential benefits of each of the systems.

The Environmental Defense has the idea that a pay as you drive program will save the consumers money and help reduce pollution, because the insurance companies will offer incentives for driving less. The pay as you drive program could also reduce the congestion caused in the overcrowded city streets and highways by cutting back on the number of drivers.

Pay as you drive programs will help make auto insurance more affordable for drivers by letting them gain more control over their auto insurance premiums.

It can be quite easy to determine how cost effective a pay as you drive program will be. This type of program will charge part of your annual premium rate into a per mile fee by assigning your car to a group of consumers according to vehicle type and the frequency of usage plus your location according to your zip code. When a per mile rate has been determined, you may be responsible for paying an upfront fee for your pre-determined mileage.

The amount you will have to pay on auto insurance and whether you will receive a rebate or have to pay more, will be determined by the amount of time you have spent in driving the car.

There have been estimates of up to twenty-five percent savings some policy holders will enjoy on their auto insurance, when using this type of program.

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.

By: Alisdair Cosgrove

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Alisdair Cosgrove loves to write about finance issues and advise on how people can save money on their personal finance outgoings and can find more of his work at the insurance site www.Peppercoin.com, offering cheap auto insurance and also great information on gap insurance. Visit today to read more of Alisdair's great articles.