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New Way to Cut Car Insurance Payment in Half

June 2, 2011

Car insurance can be expensive, so it's always exciting when we discover a new way to save money.

It's called Usage Insurance, or pay as you drive (PAYD).

It works by having a device installed in your car that records miles traveled.

Companies such as OnStar provide the driving data to the insurance company.

In return, participants who drive safely and keep mileage low will get discounts ranging from 25% to 50% off their premium. This means you can save hundreds of dollars per year.

Available so far in 34 states, the following auto insurance companies are currently offering it:

Check Insurance Rates in Your State:


Pay As You Drive Insurance can save you money, but also lower your carbon footprint. Experts estimate that if every motorist purchased PAYD, driving would decline by 8% nationwide, dropping total U.S. carbon emissions by 2%.

But there is the issue over privacy. The technology not only registers miles driven, but also driving behavior, where you drive, how you drive, and when you drive over the speed limit.

If you're a safe driver and don't mind the surveillance, this could be a great way to save a lot of money.

My Recommendation for Car Shoppers

TrueCar, Edmunds, and 1-800 Car Show are the quickest way to see the lowest car prices in your area. These sites show you no-haggle prices from dealers closest to you - and the deals are usually really good. This should be the first step you take when negotiating your car price. Follow this up with my checklist to make sure you squeeze out every last bit of savings.
- Gregg Fidan

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Gregg Fidan

About: Gregg Fidan

Gregg Fidan + is the founder of RealCarTips. After being ripped off on his first car purchase, he devoted several years to figuring out the best ways to avoid scams and negotiate the best car deals. He has written hundreds of articles on the subject of car buying and taught thousands of car shoppers how to get the best deals.

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