Low Mileage Car Insurance
With inflation on the rise, most people are trying to save money. There are plenty of new services claiming to save consumers money. Many have put off car ownership in favor of using Uber, bicycles or renting a car. People are renting and not buying.
Many young drivers don’t want the hassle of paying a car loan, auto insurance, registration, and all the other expenses accompanying owning a vehicle. In fact, with car insurance costs going up at a rate not seen in decades, some millennials have decided that car ownership is not for them. There are new ways to save money on coverage for those who choose to buy a car.
What Is Pay As You Go Auto Insurance?
Some insurance companies now offer “pay as you go” policies. These policies are designed for drivers who do not drive as much. Premiums are calculated solely based on the miles you have put on your vehicle over a coverage period, often for six months. This means you might drive 2,000 miles one month, store your car for five months, and pay only for the 2,000 miles you drove.
Pay as You Go Car Insurance is Gaining Popularity
Young people under 25 always look at the next wave of technological breakthroughs. They are also searching to save money in any way they can. Several new tech-driven companies have developed what’s called pay-as-you-go auto insurance.
For those motorists that don’t drive much, a pay-as-you-drive policy might make sense. This allows someone to pay for car insurance on an “as-needed” basis. This means if you only drive 500 miles a month, you would be paying a lot less than a person that drives 3,000 miles monthly.
These “low mileage” insurance policies could save some motorists hundreds of dollars annually. Low mileage car insurance is not a new idea, but many people are rediscovering this form of insuring a car as a way to save money.
Rather than paying for an entire six-month premium with unlimited mileage, low mileage car insurance coverage allows you to pay either based on a lower per-mile rate or the actual time you drive your vehicle. New companies like Metromile promise lower coverage costs for those low-mileage drivers.
Who Can Benefit from a Low Mileage Car Insurance Policy?
There are several forms of low-mileage insurance. Each has its benefits as well as its disadvantages. This type of coverage is excellent for people who often store their cars for extended periods or who drive very little, such as retirees. In detail, let’s go over some of the pros and cons of low-mileage automobile insurance.
The first type of pay-as-you-go option is the “low-mileage discount” insurance. This is your standard coverage, with a discount for driving fewer than a certain number of miles per year. Amigo Insurance Company can save drivers big bucks if they drive less than 800 miles per month. Apply now for a free low-mileage auto insurance quote. To start, enter your zip code and compare multiple rates in minutes.
If You Exceed The Allowed Mileage, You Will Be Charged More
The advantage of low mileage car insurance discounts is you do not lose any of your coverage. Your regular policy is still in place, just at a lower price. However, the disadvantage is that not all companies offer this type of coverage. You are responsible for keeping up with the requirements of a pay-as-you-drive car insurance policy.
Another type of low mileage car insurance is a “true low mileage policy.” This type of policy is designed for those who do not drive much, and its price is structured accordingly. With this type of policy, you can often pick and choose your coverage. You can structure your policy with the coverage you need. This includes choosing comprehensive or collision coverage.
The big advantage of low mileage policies is that you know from the outset your mileage limitations and how much your policy will go up if you exceed them. There is often a surcharge for mileage over the allotment.
In most cases, if you exceed the limit, you may be converted to a regular liability policy at full price. These policies are often less expensive than regular policies with a discount. However, low mileage car insurance policies are disadvantaged because many companies do not offer them. You often have to look for a special pay-as-you-go auto insurance carrier. Metromile is a market leader, and Esurance has “Drivesense.”
What About A Storage Policy?
There are also special policies called “storage policies,” which are very useful for people who must store their vehicles while they are gone for long periods of time. This includes traveling business people who go overseas or servicemen and women who are deployed.
The storage facilities may offer storage policies directly, but you can also find them at Amigo Insurance Company. However, as its name implies, a storage policy assumes that the car will not be driven except to take it to a storage facility or move it from one facility to another. It is not designed to provide coverage for you to drive the car occasionally.
Now you know the pros and cons of pay-as-you-go auto insurance. To see the best rates for the coverage you need, get a free quote with Amigo Insurance. Save hundreds on quality coverage at great low rates today.