When calculated alongside other regular car-related payments such as auto loans and gas, car insurance can seem like another hefty payment you may not be able to afford. Americans spend thousands alone on car insurance just to be able to drive their vehicle every year. In fact, average yearly payments range from $1,100 to $2,040[1] on premiums. Depending on how much you actually drive, this amount of money may be far too much. If you’re a part-time driver, you’ll want to consider pay-per-mile insurance.
What is pay-per-mile insurance? Simple. The driver pays an insurance premium that is directly related to how much time they spend behind the wheel. Saving money is, of course, the primary benefit; however, there are other advantages to switching insurance payment types.
“Saving money is, of course, the primary benefit; however, there are other advantages to switching insurance payment types,” said Marc Willas, senior manager at Geico.
Advantages to Pay Per Mile Insurance
By part-time driver, we mean someone who travels infrequently, relies mostly on public transportation, bike, or foot, or spends the greater part of their time at home. Pay-per-mile insurance is most beneficial to those who don’t find themselves behind the wheel every day.
“Pay-per-mile insurance is a great option for drivers who want the freedom to use their car whenever they want, but don’t want to pay the high premiums that full-time drivers often pay,” said Willas. “These insurance companies are specifically designed to cater to low mileage drivers, offering coverage based on the actual distance you drive rather than an estimated annual mileage.”
Take a look at your lifestyle, and your daily habits and determine whether or not pay-per-mile insurance is right for you. Do you:
- Work from your own home?
- Both live and work downtown?
- Live on campus as a college or university student?
- Own a second, rarely used vehicle?
- Drive an approximate 500 to 1000 miles per month?
Saving your hard-earned cash isn’t the only thing you’re preserving with pay-per-mile insurance either. In fact, you’re also saving the planet by having a lesser impact on the environment.
Defining Pay Per Mile Insurance
Your location, driving history, type of car, year, make, and model are all factors that come into play when selecting regular car insurance. You’re given a flat monthly premium, and this dollar amount doesn’t change whether you drive your car or not.
On the other hand, pay per mile insurance is different. You simply pay for how much you actually drive.
Alongside an affordable base rate that factors your age, gender and vehicle, pay per mile insurance companies track your monthly driving mileage and charge you per mile. In other words, the less you drive, the less cash comes out of your pocket.
Let’s take a quick look at the three possible billing options[2] you may receive when opting in for mileage-based insurance:
- Post-paid Ad-hoc Billing: The vehicle owner is billed at different intervals depending on their vehicle usage.
- Post-paid Recurring Billing: A regular billing period where the payments are based directly on mileage driven;
- Prepaid Mileage: A prepaid amount of miles that must be replenished monthly in order to obtain a rebate
And worry not! Pay-per-mile insurance still offers good coverage, including full comprehensive and collision coverage. You are billed a higher amount the more you drive because the risk of you getting into an accident increases the more you’re on the road. That being said, your dollar amount to be paid monthly will likely differ every month.
Finding Online Pay Per Mile Insurance Rates
So, you’re a part-time driver looking to save money on high monthly insurance premiums? Pay-per-mile coverage caters to individuals just like you. Pay for what you actually drive, not the time your car sits parked in its lot. You could save hundreds of dollars!
“Pay-per-mile insurance is an excellent option for drivers who don’t log a lot of miles on the road,” said Eric Costilas, risk analyst at USAA. “Whether you’re retired, telecommute, or simply don’t drive very often for any other reason, pay-per-mile insurance allows you to pay a flat monthly rate and only get charged for the miles you actually drive.”
Several different companies offer this exact service. Take the time to do your research, check out a few websites, fill out the questionnaires and obtain your free quotes.
“I always advise drivers to do their research and make an informed decision before signing on the dotted line for any new insurance contract,” said Melissa Villeau, sale agent at Farmers. “It’s important to understand the terms and conditions of your coverage, as well as the potential costs and benefits of different insurance options. Don’t be afraid to ask questions or seek advice from a trusted expert or advisor before making a decision.”
What Companies Offer Pay Per Mile Insurance?
Pay-per-mile is modern and up-to-date. With a flat rate charge combined with a fee cents per mile fee, you’ll come up with affordable car insurance. User-friendly applications are equally available, allowing users to track their personal mileage and file claims as needed. Let’s take a look at insurance companies that have a pay-per-mile insurance option:
Progressive Snapshot
Progressive Snapshot offers a variety of insurance plans, including pay-per-mile insurance. Use the Snapshot program[3] to monitor your driving and obtain a personalized quote based on your driving habits. Save even more money by avoiding actions like harsh breaking, harsh accelerating, late night driving and touching your phone.
Metromile
Can you imagine paying a fixed rate of $29 per month[4] for your car insurance? With Metromile, it’s actually possible, plus a few cents for each driven mile. Interestingly enough, their customers state saving up to $741 per year thanks to their low premiums. The Metromile website is simple and easy to use, allowing potential customers to calculate their rates independently. You can even choose from a range of flexible plans that offer different advantages, including roadside assistance and glass repair.
Nationwide
The Nationwide SmartMiles program offers part-time drivers insurance rates that are based on how many miles they drive. Even more so, you can access a 10% discount just for signing up and get a 40% premium discount upon renewal if you’ve proved you’re a good driver.[5] Going on a road trip? Don’t stress it. Nationwide offers to cover 250 miles per day for your excursion!
Root
Switch to Root pay-per-mile insurance and start saving a whopping 52%[6] on your car insurance alone. Start the super simple process by downloading the Root app; you’ll obtain a few quote based on your driving habits. Holiday Lyft credits and cash bonuses for referring friends and family are equally offered by Root.
References:
