The term pay as you go is commonly associated with cell phones where you buy credit and use until it runs out instead of the monthly contracts. The same idea has been available for some time in car insurance as well. It works a little different but the thinking behind and the fundamental points are the same. You only pay as much as you use or drive.
The first company that started this program was Progressive. They required motorists to install a device on their vehicles called SnapShot. This gadget transmitted information back to the company about your driving habits and auto usage. They could record day, time and distance you drove as well as general speeding and braking patterns.
This program is ideal for people who cannot otherwise get good rates. You may be a young driver with no or little driving history. Or you may be involved in an accident recently and therefore your premiums are coming up real expensive. One way of proving that you are actually better than they assume you are is to show them. Allowing companies record your activities is a good way of letting them see that you are low risk.
After fitting this tool you may want to keep your driving to minimum. A regular travels to work and home and no late night driving should keep you going and keep the costs minimal. The idea is to get through this expensive automobile insurance period and enjoy lower rates again. Once you have a solid year without an accident or traffic ticket you should be able to find decent car insurance quotes in a more conventional way.
There are other companies and programs now on the market like State Farm OnStar program that basically offer similar facilities. The good thing is that you now have several other choices to consider and see which one is less intrusive and more beneficial. It is normal to be concerned for the fact that someone is monitoring your activities. However, you need to think about the trade offs of it rather than concentrating on one aspect of it.
The applications may vary in several ways. One of them is the way the premiums charged. Some companies may charge you a set premium at the start and demand payment. This amount is than adjusted accordingly to reflect your driving and mileage. You can enjoy the discounts at the end in a way of refunds and lower premiums than onward.
Others may be happy to charge you monthly based on their recordings. If you drive a little this month you pay less. And you pay more the next month if you have taken a long road trip. This option may offer you more immediate rewards that can encourage you to keep it the same way.
When you are struggling with high premiums you shouldn’t take as it comes. You should look at your options. We discussed one way of saving money above and there may be many other methods. You can find them by doing your own research and save.