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A New Way To Save Money On Auto Insurance

It is called Pay As You Drive and offers a discount of up to 30%.  The insurance company sends you a small device that you plug in inside your car.  The device monitors your driving habits.  This includes how many miles you drive, your speed, acceleration, and braking (beware that hard breaking is not viewed favorably).  After 30 days of monitoring your driving you learn what your rate will be.  It is interesting to note that Pay As You Drive is also available in Japan, Australia, Canada, South Africa, and the United Kingdom.

The concept sounds good, and I am all for saving money, but there are clearly some privacy issues that are raised here.  Progressive, the major national insurer offering this type of coverage, says that they are not tracking the actual location of your vehicle.  The only thing being monitored is how you are driving, not where you are driving.  Their privacy policy states clearly that the device does not have a GPS and your physical location will not be tracked.  After six months of being monitored, you are able to send back the device and you ‘lock in’ your savings (although I am sure that future events such as traffic tickets and accidents would cause your rate to be reviewed).

It was interesting to learn that one of the largest factors being reviewed is the total number of miles that are driven.  It appears that those that will save the most under this program are individuals that drive the least amount of miles.  While most auto insurance applications ask you to estimate the amount of miles you drive, the on board device records your actual mileage.

Available Programs:

Progressive Snapshot

All State Drive Wise

Mile Meter

I love the idea of this, but I hate the idea of my vehicle being tracked.  I may just need to get over that to save some money.  I would likely fall into the category of someone that puts very few miles on my automobile.  I work from home and drive my motorcycle most places, so this may turn out to be for me.  My wife, however, may not pass this test as she is a very hard braker (the reason I drive when we are in the car together).  She blames this on her Southern California driving habits...   I will keep you posted if we decide to try this.

Please use the comment section below to share your thoughts on this.  Would you give up a little privacy to save a few bucks?

Helping you make the most of God’s money!

James L. Paris
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