The Brookings Institution tells us that their studies find that 2 out of every 3 households in the United States would save money if they switch their auto insurance to a Pay As You Drive plan. Pay As You Drive insurance is based on the numbers of miles an insured’s car is driven. They give you an incentive to drive less and lower your premiums.
Who should take a closer look at Pay As You Drive coverage? While anyone can consider these insurance plans, the real winters are low-mileage and low-income drivers. Low-income drivers tend to be low-mileage drivers for the obvious reason that they have to spend less money on driving. Pay As You Drive adds to their savings by reducing insurance costs even while they save on fuel, maintenance, and replacement.
In addition, low mileage drivers tend to subsidize high mileage drivers under a traditional insurance program, in which drivers pay the same amount of money for insurance premiums whether they drive a few hundred miles or a few thousand miles. This subsidy is removed under a Pay As You Drive insurance program. Higher mileage drivers would pay more for their insurance under a Pay As You Drive insurance system, which makes this system a more fair and equitable way to charge for insurance premiums.
It’s true, of course, that not all low-mileage drivers and low-income drivers. People who live in very large cities often don’t drive cars, and many keep their cars in the garage for the simple reason that they care about the earth. Either way, the fewer miles people drive, the less they contribute to pollution and greenhouse gases. Any driver who feels he or she deserves some monetary recognition for being a friend of the earth should look into Pay As You Drive.
Drivers interested in saving money in a tight economy would also benefit from Pay As You Drive insurance. Since the insurance premium costs are based on the amount of miles driven, there is an incentive to drive fewer miles because that?s how you save money. Drivers who utilize Pay As You Drive insurance also spend less money on gas and auto maintenance due to their reduced driving. And don?t forget that the less you drive your vehicle, the longer you can keep it after you pay for it. Vehicles tend to last longer if we drive them less.
Almost any driver can benefit from Pay As You Drive. If you are interested in learning more about how these plans can save you money, help save the environment, and save your having to buy a new car, see a qualified insurance broker. Your insurance agent can answer your questions and create just the right plan to help you maintain the coverage you need and save hundreds of dollars each year.
Tom Martens is the content syndication coordinator for Carinsurancesa.co.za. South Arica?s leading car insurance portal.
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