Mileage based insurance programs, also called pay as you drive insurance programs, are car insurance policies that charge customers based on their actual driving habits. The insurance company provides customers with a small electronic device that plugs in underneath the steering wheel. When the customer drives normally, the device records information and sends it back to the insurance company digitally. The customer’s insurance rates fluctuate based on the actual statistics collected from the device, rather than the driver’s history or other estimated demographics. Instead of auto insurance discounts, the insurance company makes the policy itself a discount program.

Drive Less

The main indicator of your insurance costs when you are using a mileage-based program is how many miles you drive. The more you drive, the more expensive your insurance will be. Drivers who can consolidate their trips and reduce their mileage will be able to see a significant difference in their insurance rates after a month on a mileage-based program. Participating drivers have much more control over their insurance costs through this type of program. Reducing the number of miles driven also reduces the emissions produced, which is good for the environment as well.