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The pay as you go program is officially called Environmental Defense and its purpose is to track an individual’s car mileage. Two ways are being proposed to accomplished. One method is done by installing a proprietary odometer that contains an embedded cell phone that periodically calls in your mileage to your insurance company.
One other method of tracking your travel route to report the mileage involves installing a GPS device into a phone in the car, just as the On Star system works. A little more information may be helpful in making a clear decision on the method that is right for you.
There are some consumers who feel that the GPS system imposes on their right to privacy so they do not want it for this reason. The GPS device has certain advantages over the propriety odometer method of tracking mileage because it not only keeps the mileage count, it also pinpoints your time and route of travel. So you need to weigh your privacy concerns against the potential benefits.
Since the insurance companies will be offering a financial incentive for driving less, the Environmental Defense thinks that a pay as you drive program will eventually save the consumers money as well as helping to reduce pollution. One benefit of the pay as you drive program would be a reduction in the number of drivers from the already congested streets and highways of the cities where traffic can be a tremendous problem.
The pay as you drive insurance programs could make auto insurance more affordable by giving the consumers more control over their auto insurance premiums.
You can easily determine how cost effective a pay as you drive program can be for you. A part of your annual premium rate would be charged into a per mile fee by assigning your car to a group, according to vehicle type and usage and your zip code. When the per mile rate is determined you may have to pay an upfront fee for your pre-determined mileage. The determining factor of whether you receive a rebate or have to pay more is the amount of time you spend driving your vehicle.
Some auto insurance policy holders are estimated to perhaps be able to receive a savings of about 25% on their car insurance if they were to use a pay as you drive program.
If our futures can be improved through the pay as you drive programs cutting the cost of insurance and relieving the congestion and pollution on our highways, it will be wonderful.
Category: Car InsuranceWhat Are Pay As You Go Auto Insurance Programs? was written by:Author:Alisdair CosgroveAdded: Wed, 02 Jul 2008 07:01:13 -0400 This Article Has Been Read 28 times View all Alisdair Cosgrove's articlesAbout the Author: Alisdair Cosgrove has been writing personal finance articles for many years and can find more of his work at the UK site www.TheMoneyStop.co.uk, offering best credit cards along with great best business bank account and also cheap car insurance. Visit today to find a great deal or read one more of Alsidair's great articles. |
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