Pay As You Drive Car Insurance Explained

There is a vehicle insurance option available that offers you a premium based on how far you drive each month. This may be a confusing notion, but it is actually quite simple. Fact – if you drive less, you will pay less. Naturally the rate that they charge you will be determined on your regular factors such as your age, driving history and make and model of vehicle.

Once they have taken these factors into consideration, they will work out a standard premium based on that. This is a small fixed premium that you will pay every month no matter what, to protect your car in the event of theft. The rest of your premium is deductable according to how far you travel each month. It is no miracle that the car insurance company knows how far you travel – they install a tracking device which gauges how far you travel each month. This tracking device also comes in handy for tracing your vehicle should it be stolen, which in turn lowers your premium for the car being a lower theft risk. The motor insurance company has the peace of mind in knowing that paying out for a stolen vehicle is not likely as they would most probably be able to track it down with the installed tracking device.

You will be able to track your mileage traveled during the course of the month using their online password protected system. This is also another way that employers who take out insurance for their employees can track where their employees are traveling during work hours.

The pay as you drive premium is calculated on a cent per kilometer rate that is determined according to your fixed factors such as your driving history, age, address and type of car. Some cars are more infamous for being stolen than others, or have a higher incidence of being involved in a collision. These vehicles usually go hand in hand with a higher premium. The other factors are beyond your control, but it is all you can do to drive as carefully as possible to avoid collisions. Always adhere to the rules of the road and never drive when you are tired or under the influence of alcohol. The less amount of times you claim, the lower your monthly premium will stay.