Saving on Car Insurance With Public Transportation

Consumer Bob delves into the idea of "pay-by-the-mile" car insurance programs

If the high gas prices are causing you to drive less and use public transportation more often, you might be able to catch a break on your car insurance rates.

New “pay-by-the-mile” car insurance rates are being offered to drivers by some insurance companies.

Drivers essentially pay lower rates for their insurance for putting less mileage on their cars.

State Farm Insurance Agent Walt Waggener says more of his customers are changing their car insurance plan and linking it directly to the number of miles they drive.

The plan is based on driving 19,000 miles a year.

Your insurance rate then goes down for every 500 miles you drive under that.

“It varies depending on exactly which mileage, but I’ve seen savings averaging 15, 20-percent sometimes with my clients,” said Waggener.

“The fewer miles you drive, the less you pay.”

Many clients are cutting back on their driving due to the prices at the pump. Some are carpooling more often these days; some are taking public transportation.

If clients drive more than 19,000 miles per year, this program might not be the right fit.

But, if drivers do sign up for this program with State Farm, a built-in On Star system will keep track of their miles, or they could always keep track themselves.

“We use the honor system, we ask you how many miles are on the car, once you’re on the program, one time per year,” explained Waggener.

For many drivers, this money-saving idea may really work, especially if they’re already finding themselves driving less.

“I do not go any place additional at all,” driver Gary Beaudry said.

“I’m going to drive regardless. I put the same amount in every time -- $20 bucks. Gives me less than a tank of gas now,” added driver Hakim Hampton.

A growing number of insurance companies are now offering the “pay- by-the-mile” insurance rate. After the dark clouds of record-high gas prices, this news might just be the silver lining.

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