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Can I get pay-as-I drive auto insurance?

Here's what you need to know...
  • There are two types of pay-as-you-drive auto insurance–’s and coverage by mileage
  • The downside to coverage by mileage is that your rates can vary since they depend on how much you drive
  • One way to save even more on auto insurance is to check on discounts

There are two different types of pay-as-you-drive car insurance:

  • Progressive’s Snapshot program — This program literally has you pay for a policy based on the way you drive–whether you’re an aggressive driver, a safe driver, etc.
  • Pay-as-you-go car insurance —  a completely different plan offered by only a few smaller insurance companies. This coverage charges you according to how much you drive–your distance in miles as opposed to your driving behavior.

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Progressive’s Pay-as-You-Drive Car Insurance

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Despite the name, Progressive’s program is not one that allows you to pay for insurance based on how much you drive.

Instead, this is a program called Snapshot. Snapshot is a device/program that tracks your driving habits for at least a month. Then, a personalized discount is created for you based on those driving habits.

In this case, when they say pay-as-you-drive, they mean pay for your insurance based on the way that you drive.

Only current Progressive policyholders are able to try Snapshot. According to Progressive, if you turn out to be a bad driver, you won’t receive a discount but your rates won’t increase either–unless you live in Rhode Island. Progressive will allow you to keep the Snapshot device, which plugs into your steering wheel column, for up to six months to determine your driving habits.

The benefit to this is if you start out with some issues while driving but improve over time, then you can benefit from a discount based on your most current data.

According to Progressive, they don’t track any personal information about your driving, such as where you go. In fact, this device is not a GPS-enabled device and it doesn’t know where you are. They also don’t track your speed limit, whether you are breaking the law or anything like that.

The maximum discount you can receive through Progressive’s pay-as-you-drive program is 30 percent, and the least amount is zero percent. This is on top of any other discounts that are currently being offered by Progressive.

Other Pay-as-You-Drive Car Insurance

Another pay-as-you-drive option is insurance that is actually based on how much you drive.

Although the premise is similar to what Progressive has to offer, the discounts available are lower. In this case, a device is attached to your vehicle that actually records how much you drive.

Your insurance is a base amount, determined by factors such as your current driving record, where you live, and so on.

However, after that, your rates are based on the actual driving that you do. The benefit to this is if you don’t drive a lot, then you could get a reduction in your insurance costs.

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Car insurance providers consider light use of a vehicle as “pleasure driving” and discount it accordingly. This could be up to 50 percent less than what you would pay compared to traditional insurance coverage.

The downside is that this cost can actually vary monthly rather than being based on a six month set amount, which can make it difficult to budget.

Pay-as-you-drive car insurance is a newer concept and isn’t available in every state. In addition, there aren’t many companies that actually offer this as an option to drivers.

Lastly, you need to be comfortable with the fact that your movements will be monitored, which for some people is unacceptable.

Alternatives to Pay-as-You-Drive Car Insurance

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While Progressive’s pay-as-you-drive option is available in almost all 50 states, you won’t find many options for the other type of pay-as-you-drive car insurance. In addition, for Progressive’s program, you have to already be a policyholder in order to enroll.

If neither of these options works for you, then you will need to work with standard auto insurance plans.

The good news is that you can still save money with these types of plans if you make the small effort to shop around for different rates. What’s more, even after you are quoted a rate, if you ensure that any discounts you qualify for are applied to your policy you could get an even lower rate for your auto insurance policy.

Some discounts you might receive include:

Regardless of the type of driver you happen to be, there are alternatives for you from more than one insurance company. You should not assume that you current insurer is offering you the lowest rates.

Instead, you should compare rates between insurance companies at least once a year to ensure that you are getting the best price for your policy. You can compare car insurance quotes right now by entering your ZIP code below!

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