Pay As You Drive Auto Insurance for the Smart Driver

By: Elle

More and more states are embracing the pay-as-you-drive concept of auto insurance. Texas for one is being hailed as “the first state in the U.S. to have a 'by-the-mile' choice of auto insurance that gives drivers the opportunity to save money while also protecting the environment”. But as a driver, would it be smart for you to adopt this? What has the pay-as-you-drive auto insurance in store for you and yes, to your pocket? Some doubts there before the facts are in, is what distinguishes you as a smart driver, after all.!br>
Good news for you, the pay-as-you-drive auto insurance allows you to pay in proportion to how much driving miles you have logged. This may turn out to be more expensive if you are a heavy non-stop driver. But what if you are the driver who has other cars running everyday, and one is just lying in the garage. Wouldn’t it be fair to pay less for the “sleeping” car? Or how about if you are often out of the country for business with a mostly lying in wait in the garage until you’re back in town? And perhaps, in this day and technological age, you are one of those telecommuting entrepreneurs or executive, whose office is also in your home. Or let’s say you are a deeply engaged environmentalist, who find commuting, carpooling, biking or even walking as better alternatives to riding your car everyday. We hope you are getting the picture now.
Traditionally, auto insurance is a fixed expense. It is like an eat-all-you-can buffet. You pay an amount no matter how much you eat. So, people pay the same amount no matter how much or how less they drive. True that auto insurance companies provide discounts if you drive less, but discounts are still discretionary on the company’s side. With the PAYD, it is already a choice that drivers can pick.
Today, it is considered as one of the best solutions to reward drivers who drive less, and making insurance more equitable. This new insurance scheme is expected by the motoring enthusiasts to significantly reduce driving--and clear the roads of congestion, collisions, and pollution that driving entails. PAYD auto insurance will now give a respite to those who oftentimes take public transport or join a carpool, from paying the same auto insurance rate. If you live near you work, or you work from home, or you have a secondary car, which is rarely driven, PAYD is a better choice for your coverage.
An Environmental Defense Fund study reports that this insurance scheme could save the state of California of 5.5 billion gallons of gasoline and about $40 billion in car-related expenses between 2009 and 2020. In related study by the Brookings Institute, potential savings of about $270 per year for every household can be realized. The PAYD scheme is also seen to be of direct benefit to low-income families, as those in the lower-income typically drive lesser miles.
So isn’t it good to be rewarded if you drive less?

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