Pay as You Go Car Insurance

Have you caught wind of “pay as you go car insurance” taking off in Georgia? It’s pretty new, just hit the scene about five years ago, but it’s quickly becoming a hit, especially with the millennial crowd.

Loads of people are jumping on the “pay as you go car insurance” bandwagon. It’s a savvy move for those who don’t clock many miles, as it lowers their car insurance premiums to match their actual driving risk. This “pay for when you drive” scheme has even seen some drivers slash their insurance costs in half!

What is Pay as You Drive Auto Insurance?

It’s this fresh type of coverage meant for folks who aren’t on the road much, offering them a chance to pay just for the miles they drive—hence the name “pay as you go” car insurance. For ages, drivers who didn’t drive much felt the pinch paying as much as heavy road users, some of whom drive 200% to 300% more each month.

With pay as you drive insurance, your charges are tied only to the monthly miles you clock. It’s a game-changer for fixing those unfair pricing gaps where some would pay heaps but barely drive.

Pay as You Go Car Insurance Rates are Based on Miles Driven

This specialized type of insurance simply charges you based on the actual miles you travel. For a long time, many drivers were hit with flat fees, no matter their actual road usage. Interestingly, an up-and-comer in the “pay as you go insurance” sphere, Metromile, reckons about 65% of drivers have been overpaying.

Pay to go auto insurance aims to overhaul this by setting fairer pricing based solely on your mileage. It’s time to check out different rates—just pop in your zip code and see what you could be saving.

How Does Pay as You Go Insurance Work?

It all starts with a small telematics device, roughly the size of a smartphone, that gets installed in your car. This gadget takes a deep dive into your driving habits, recording:

• The daily miles you drive
• Your driving speed
• Your braking habits
• The times you’re most often driving

This device sends all that data to your insurer, who then uses it to tailor your insurance rates. Generally, the more you drive and the riskier your habits, the more you pay. Conversely, the less you drive and the safer you are, the less you fork out.

Another cool aspect is that many insurers allow you to access this telematics data online. It’s a great tool to help you spot weak spots in your driving and improve. Making these improvements could even snag you a lower rate in your next payment cycle.

It’s crucial to remember that each insurer has its own method for setting rates based on the miles you drive. Rates might also fluctuate based on where and when you drive the most. For instance, you’re more likely to run into trouble driving during rush hour in downtown Los Angeles than if you were heading to your local gym two miles away at 9 PM. Generally, the safer and less risky your driving habits are, the lower your rates.

Companies Offering Pay Per Mile Car Insurance

Right now, four insurers are leading the pack with these mileage-based policies. 

• Mile Auto: A newer name offering low coverage in Georgia, Illinois, and Oregon.
• Metromile: Setting the pace with rates starting at $29 per month plus $.06 per mile driven, available in multiple states including Washington, California, and New Jersey.
• Nationwide SmartMiles: Available across 21 states including Arizona, Colorado, and Texas.
• Allstate Milewise: Present in thirteen states, including Maryland, Virginia, and Washington.

To get the best rates and coverage options, just enter your zip code and fill out a free quote online application.

Types of Coverage Offered

Just like any standard insurer, pay as you drive car insurance companies offer the usual types: liability, collision, and comprehensive. If your vehicle is leased or financed, you’re likely required to have comprehensive coverage. But here’s a kicker: with full coverage pay-as-you-drive insurance, you could still pocket savings of 30% or more if you drive under 800 miles a month.

Who Needs Pay as You Go Car Insurance?

Let’s be real; car insurance is a necessary evil for most of us. While coverage is compulsory, these new options could slash your premiums by half or even more. Considering the average U.S. car insurance bill runs about $1,321 annually, switching to pay as you drive insurance might save you upwards of $650 a year.

This is especially significant for those on a tight budget, like students. Here are some typical drivers who could benefit from pay as you drive auto insurance:

• Low mileage drivers who drive less than 1,000 miles a month
• Folks who bike to work or carpool and don’t use their car much
• Remote workers who hardly drive
• Safe drivers, particularly those young drivers under 25 looking to cut costs

Who Can Sign up for Usage-Based Auto Insurance Coverage?

Anyone is free to apply for this innovative auto insurance option available from just four companies in select states. Each insurer uses its own criteria to determine eligibility. High-risk drivers with a history of tickets and accidents might find it tough to qualify.

Millennials between 21 to 40, who are all about embracing new tech and fed up with paying extra just because of their age, are particularly drawn to usage-based car insurance.

What Needs to be Installed to Track Mileage?

You don’t need any special tech to start with pay per mile auto insurance. The insurer provides a device, which you’ll install in your car’s onboard diagnostics port, a standard feature in all vehicles made since 1996. If your car is older than that, setting it up might be more challenging. Most pay as you drive companies also let you monitor your driving stats via your smartphone.

Advantages of Pay as You Drive Car Insurance

The biggest perk of pay as you go car insurance is how it lets drivers manage their monthly costs. Take Metromile as an example: with rates starting at $29 a month plus six cents per mile, someone averaging 500 miles a month would only pay about $59, way below the national median of $117. 

This approach can save safe, low-mileage drivers a tidy sum—up to $600 or more annually. Pay as you go auto insurance really hands the reins of cost control back to the driver.

Disadvantages of Pay-as-You Drive Car Insurance

The downside? If you start driving a lot more, say for a new job or a side gig, your monthly rates will skyrocket. There’s also the psychological effect; knowing each mile costs might curb your spontaneity for leisure drives.

Conclusion

For those who keep it under 800 miles a month, pay as you go car insurance could shave off $300 or more from your annual expenses. It’s a straightforward system, easy to sign up for, and you can keep tabs on your rates via your smartphone. Pay as you drive car insurance could very well be the way of the future. Curious? Just enter your zip code to explore rates and plans.