Pay-as-you-drive may be the future of car insurance and a way to save money -- that's clearly what insurers are suggesting -- but is it the best coverage for you?
If you're like most drivers, maybe not.
If you drive a lot, at the wrong times of day, or are reluctant to give up the left lane, there are many other car insurance discounts available. Not all low-mileage discounts require a pay-as-you-drive (PAYD) device, for example.
But few offer the savings potential that maxed-out PAYD plans do.The gizmos used by car insurance companies promise discounts of as much as 50 percent. They come in two types:
- An insurer-supplied device that plugs into your car's onboard diagnostics (OBDII) port and typically reports your car's mileage, speed, braking events and hours of operation.
- A car manufacturer-designed telematics system, such as OnStar or Sync, that typically reports only mileage.