Thinking About Pay-as-you-drive

By Author: Marcus Stalder
Total Articles: 491
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Politicians sometimes live in a parallel universe where what they say and do seems disconnected from the world we live in. Take Scott Walker over in Wisconsin as an example. He's proposing to layoff thousands of unionized public employees in a state that already has high unemployment. One of the reasons why the deficit is so high in this state is because, with fewer people working, the tax receipts are down. You can't tell a GOP Governor to raise taxes to close the deficit. It can only come by sticking to your principles and cutting jobs. So his solution to the problem is actually going to make the problem worse. Now add in the national picture of foreclosures still roiling the housing market, credit still hard to find, and prices generally on the increase. The result is increasing difficulty in balancing the books at home. Even middle class citizens, who always thought they had enough money coming in, are finding life a struggle.

Sadly, it's all going to get worse unless the political turmoil in the Middle East calms down. This is where most of our oil comes from and, as it stands, production is being cut, particularly ...
... in Libya. The price of crude on the international markets has been rising quite quickly and this feeds through to the price we pay at the pumps. You have probably noticed the price per gallon for gas moving steadily up. The experts are predicting we may be back over $4 a gallon come the summer months. So, when your family budget is under real pressure and prices rise, you have to bite the bullet and drive less. Well, if that's your solution, pay-as-you-drive may offer you savings.

This has been running as an experiment in many states for some time. The problem is the lack of honesty in many drivers who claim to drive less but actually drive more. But technology offers greater protection to both the insurance companies and us more honest folk. As it is, we pay more because the cheats have more accidents than estimated. As the new on-board systems are rolled out, we can genuinely pay by the mile. Some manufacturers already fit GPS transmitters and technology for monitoring the engine, brake pads, etc. This technology can also transmit how many miles we travel and the time of day. Insurers have also been developing black boxes we can easily fit to our vehicles that do the same.

If you're prepared to accept some loss of privacy, the bigger insurers are suggesting the savings on their pay-as-you-drive auto insurance policy could be as high as 50% for those who only drive a few miles a month at off-peak times. This will give the biggest savings to seniors, homemakers and the unemployed who no longer have those commutes. Look carefully at what's available in your state. If pay-as-you-drive is an option, get auto insurance quotes. If the savings are not enough to justify giving up on your current policy, you've lost nothing. But this really could save you money if your mileage is lower than average.