Pay As You Go Car Insurance – A Boon to Combat Recession
With the recession showing no signs of easing, customers are getting more calculated about the money they spend and on what, and this is why pay as you go car insurance is gaining more ground.
Previously, the headway on reducing expenditure in terms of car insurance was termed as being difficult as owning a car meant paying insurance, whether the car is driven or not. Nevertheless, this is no longer the cause of concern for consumers with the advent of “pay as you go car insurance” options.
This particular insurance option has been launched by most companies and several others are also testing the waters with it. Other than USA, this unique option is also available in countries like Africa, UK, Japan, Canada and others.
The pay as you go car insurance uses the advanced GPS technology to track the number of miles travelled and also driving behavior such as abrupt stops and starts, and frequent accelerations. The device is plugged into the automobile and the insurance company uses this recorded data to charge its clients.
As the concept is very new, generally most of the companies provide excellent discounts for registration and even for low mileage. The discounts have potential chances of multiplying, if the driver maintains good driving records.
This can be especially advantageous for people owning more than one car where one has lower mileage than the other.
Since pay as you go car insurance can be availed only when you are driving, it gives people an added impetus to avail public modes of transportation or walk which has manifold health benefits. This also makes it a very lucrative option for students and for teenagers who can’t afford to pay large premiums.
The main disadvantage of this system is the loss of privacy as your every movement is tracked and this being only available to people who average less than 10,000 miles per year. the additional disadvantages include varying rates during the day, high cost of initial installation of the device, and levied penalty upon exceeding the mileage limits.
However, if thevariables are well managed, then pay as you go car insurance system s are excellent for people looking to save some money on insurance costs.
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