Over the years, many auto insurance companies have looked for multiple ways to respond to changing consumer needs. While fuel prices are on the rise, consumers all across the country are trying to find some way to save money at the pump. The cost of auto insurance plus the rising cost of gasoline for our cars has quite a strangle hold on our finances. A new insurance program known as a pay as you drive program which may be able to offer drivers some relief on their finances, has been the response of some insurance companies.



The purpose of the program is to track an individual's car mileage, it is called Environmental Defense officially. In order to accomplish this there are two proposed ways. The installation of a proprietary odometer that has an embedded cell phone that calls in your mileage to your insurance company from time to time.

The other often used method of tracking mileage, is a GPS device installed in a phone in your car to track the travel route you are taking, much like the On Star system does. 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. What you need to do is weigh your privacy concerns against the possible benefits of the method.

A pay as you drive program may help to save money for the consumers and reduce the threat of pollution; this is the belief of the Environmental Defense because insurance companies will offer you incentives for driving less. The pay as you drive program could also reduce the congestion in cities where the highways are overcrowded and the traffic problems are extensive by reducing the number of drivers.

Pay as you drive programs could make auto insurance more affordable for drivers by giving them some control over their auto insurance premiums.

You can easily determine how cost effective a pay as you drive program can be for you. The pay as you drive program would charge part of your annual premium rate into a per mile fee by your car being assigned to a group in accordance with your vehicle type and usage plus your zip code. When a per mile rate is determined, you may be responsible for paying an upfront fee for your pre-determined mileage. The amount of time you have spent driving your car will determine whether you are to receive a rebate or have to pay more for your car insurance.

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.

We must ask ourselves if the pay as you drive auto insurance programs can improve our way of life, through less pollution and congestion and lower costing insurance coverage, what are we waiting for.