Pay As You Go Car Insurance

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Pay As You Go Car Insurance

There’s this new insurance trend in Georgia and other states that’s catching on—“pay as you go car insurance.” It’s been around for about five years now, but it’s really starting to get some traction, especially with the millennial crowd.

Basically, more folks are hopping on this to shrink their premiums. It’s perfect for drivers who don’t hit the road that much but still want to be covered. Think of it as only paying for the miles you actually drive. Some people claim that they have managed to cut their insurance costs by half with this setup!

Driver looking at a Pay-As-You-Go Car Insurance mobile application

What Exactly is Pay as You Drive Auto Insurance? 

Well, it’s tailor-made for drivers who aren’t clocking many miles. If you’re the type who only drives occasionally, you’d probably prefer not to shell out as much as in monthly insurance rates as someone who’s practically living in their car, right? This type of insurance lets you pay per mile, so if you don’t drive much, you don’t pay much.

With this plan, you’re billed only for the miles you drive each month. It’s a fairer system, especially when you think about those who were paying a flat rate but barely using their cars. It’s about time they got a break!

Miles Driven Determine Pay-As-You-Go Car Insurance Rates

“Pay as You Go” car insurance is all about paying for just the miles you actually drive. It’s a game-changer for anyone who’s ever felt ripped off by their car insurance. You know, like paying the same hefty fee even if your car spends more time parked than on the move. Metromile, a big name in this market, reckons that about 65% of drivers are overpaying big time.

Here’s the scoop: For years, if you didn’t drive much, you were basically subsidizing those road warriors who rack up the miles but weren’t paying their fair share. The whole idea behind pay-as-you-go insurance is to even the playing field. You only cough up cash for the miles you drive. 

Want to see how much you could be saving? Just enter your zip code into our Rodney D Young quote checker and give it a whirl.

How Does Pay Per Mile Car Insurance Work?

So, how does it actually work? Well, they pop this small device into your car—it’s no bigger than your smartphone. This telematics tracking device keeps an eye on a few key things: how many miles you drive, how fast you’re going, your braking style, and when you hit the road. It sends all this info back to your insurance company, which then uses it to figure out your insurance rates. 

Drive a lot and like to push the speed limit? Your rate might inch up. But if you’re someone who only cruises a few miles and drive like a saint, you’ll likely see lower rates.

And get this: You can even check out the data on your driving habits online. It’s a great way to spot areas where you might need to improve. Get better at driving, and you could get even lower rates down the line.

Each insurance company has its own way of crunching these numbers, and how much you pay can also depend on where and when you drive. Rush hour in downtown Los Angeles? That might cost you more than a late-night zip to the gym. But the bottom line is, the safer and less you drive, the less you pay. It’s as simple as that.

What is Needed to Track My Mileage?

Nothing too fancy. When you sign up, the insurance company will hand over a small device. You just plug this gadget into your car’s onboard diagnostics port, which is a standard feature in cars made after 1996. 

Got an older ride? Cars from 1995 or earlier might be a bit trickier to set up. The cool part? Most companies let you keep tabs on your mileage and driving habits right from your smartphone.

Companies Offering Pay As You Go Car Insurance

If you’re curious about who’s offering pay-per-mile car insurance, you’re in luck because there are a few companies that have jumped on this bandwagon.

On the one hand, Mile Auto is shaking things up with coverage in Georgia, Illinois, and Oregon. They’re pretty new to the scene but are making waves.

Metromile, a big player in the game, has rates starting at $29 a month plus 6 cents per mile. They’ve got a pretty broad reach, offering plans in states like Washington, California, Arizona, and a few more.

Nationwide SmartMiles isn’t kidding around either—they’re available in a whopping 21 states including Texas, Ohio, and Virginia, just to name a few.

Allstate Milewise is also in the mix, with coverage in thirteen states such as Maryland, New Jersey, and Washington.

Want to dig into the details and see what’s best for you? Just throw your zip code in our online form and check out your options for free.

Types of Coverage Offered

Now, let’s talk about coverage types. Just like your standard insurance, these pay-as-you-drive insurance companies offer the big three: Liability, Collision, and Comprehensive Coverage. You’ll likely need to snag comprehensive coverage if your ride is leased or financed. The good news? Even with full coverage, if you’re driving less than 800 miles a month, you could still save upwards of 30% with this kind of plan. So, if you’re not exactly racking up the miles, this could be a real money-saver for you.

Who Needs Usage-Based Car Insurance?

Well, let’s break it down. Car insurance is one of those necessary evils for most of us, right? But the good news is, there are new ways to cut down on those costs—sometimes by half or even more. Imagine reducing that typical annual car insurance rate of about $1,321 down by $650 just by switching to a plan where you pay based on how much you actually drive.

This can be a real game-changer, especially for folks pinching pennies, like students. It could mean the difference between surviving each month or having a little breathing room. So, who’s the ideal candidate for pay-as-you-go car insurance? 

  • Not-So-Frequent Drivers: If you’re clocking less than 1,000 miles per month, maybe because you bike to work or carpool, this could be right up your alley.
  • Work-from-Homers or Teleworkers: If your commute is just from your bed to your desk, your car probably isn’t seeing a lot of action.
  • Safe Drivers: If you’re careful on the road and keep your mileage low, especially if you’re under 25, these plans could lower your rates.

Who Can Sign Up for Pay As You Go Car Insurance? 

Pretty much any driver can apply for this new type of auto insurance, but it’s only offered by a handful of companies in certain states. They’ll check out your driving history and use their own criteria to decide if you’re eligible. 

Just a heads up: If you tend to hit the accelerator, or have a history of fender benders, you might find it tougher to get in.

This type of insurance is especially popular among millennials and even younger, ages 21 to 40 or about, who are tech-savvy and sick of paying more just because they’re young. If that sounds like you, this might just be the cost-saving solution you’ve been looking for.

Why Go for Pay-As-You-Drive Car Insurance? 

The biggest perk of pay as you go car insurance is the control it gives you over your monthly insurance costs. Take Metromile, for instance. They start their rates at $29 a month, plus 6 cents for every mile you drive. If you’re driving about 500 miles a month, you’d only be paying around $59. That’s way below the national average of $117 a month. Over the year, you could save up to $600 or more—pretty sweet for folks who don’t spend much time on the road.

Drawbacks of Pay As You Go Car Insurance

If you end up driving a lot, your monthly rates could spike with pay-per-mile insurance. Imagine someone who starts using their car for a delivery job and drives over 2,000 miles a month. Their cost might jump to $159 or more, which beats the national average. Plus, knowing you’re paying per mile might make you think twice about taking that extra trip, which can feel a bit restrictive.

What’s the Bottom Line? 

For drivers who keep it under 800 miles a month, this type of insurance could cut your costs by $300 annually and put you in the driver’s seat when it comes to insurance expenses. It’s easy to sign up, and you can monitor everything from your phone. If you’re all about saving money and driving less, pay-as-you-drive insurance could be a perfect fit. Curious? Just enter your zip code and compare the options available. It’s that easy, and who knows, this might just be the way of the future for car insurance.