Should You Consider Pay As You Drive?
The Brookings Institution reports studies finding that 2 out of every 3 American households would save money if they switched to Pay As You Drive auto coverage, with an average savings of $270 per year. Pay As You Drive insurance, as its name suggests, is priced on the basis of the number of miles you drive. These plans give you a real reason to drive less and save more.
Who should look closely at Pay As You Drive? Anyone could consider a Pay As You Drive plan, but the real winners are low-income and low-mileage drivers. Low-income drivers also tend to below-mileage drivers due to the high cost of operating their cars. While frugal usage of your car does not save you money on traditional car insurance, it is actually rewarded with Pay As You Drive. And as you save money on your car insurance, you also save money on gas, maintenance, wear and tear, and the cost of replacing your vehicle.
Another benefit of Pay As You Drive is fairness. Under traditional coverage, low-mileage drivers subsidize the high-mileage drivers who pay the same premiums, but, because of how much time they spend on the road, are more likely to be involved in crashes. This inequitable subsidy is removed under Pay As You Drive. Higher-mileage drivers pay higher premiums, and lower-mileage drivers pay less.
Of course, not all low-mileage drivers are low-income drivers. Many people don’t drive just because they care about the environment. The fewer miles people drive, the less automobiles contribute to greenhouse gases, and the less congestion there is on the road. Any driver interested in protecting the ecology should also consider Pay As You Drive.
Is there anyone else who could benefit from Pay As You Drive? Drivers looking to cut their insurance outlays in tough economic times should also look at these plans. Computing premiums on the basis of miles driven gives a tangible incentive for driving less. And don’t forget, the less you drive, the less often you have to replace your vehicles. Cars tend to last longer if their drivers use them less.
The overwhelming majority of drivers are better off with a Pay As You Drive policy. If you want to learn how these innovative plans can lower your costs, help save the environment, and help you put off buying a new car, see your insurance agent. Your authorized insurance provider can answer all your questions and create a plan that may save you hundreds of dollars each year.
Tom Martens is the content syndication coordinator for Carinsurancesa.co.za. South Arica?s leading car insurance portal.
Did you enjoy this post? Why not leave a comment below and continue the conversation, or subscribe to my feed and get articles like this delivered automatically to your feed reader.
Comments
No comments yet.
Leave a comment