NEW YORK (MainStreet) — Tracking devices inside automobiles has raised privacy concerns, but the ones that have been installed for pay-as-you-drive car insurance can help drivers save money each month.

A recent comment from a Ford Motor executive about their GPS tracking devices has shed light on the concerns many Americans have about tracking devices in their cars and what type of data is being collected and how it is used.

Yet while many consumers are concerned about protecting their privacy and keeping "Big Brother" out of their affairs, Laura Adams, an senior analyst, said in-car tracking devices can benefit drivers.

During the past three to five years, millions of Americans have signed up for pay-as-you-drive car insurance policies which track how fast a vehicle is driven, how hard the brakes are applied and what time of day you are driving. About two-thirds of pay-as-you-drive car insurance policyholders are saving money and no consumers have had their rates raised.

"For those willing to give up a little information, they are seeing a financial reward from it," she said.

Some insurance carriers start giving drivers discounts on their auto insurance in as little as two months, while others want to track usage for at least six months to determine if drivers are meeting their standards, Adams said. For instance, State Farm only tracks the amount of mileage driven by consumers and does not collect other data, she said. Most insurance companies give discounts based on your driving pattern – how fast you drive, how hard you hit your brakes, if you are driving after midnight and other similar information.

"The big draw for consumers is getting discounts and rates cut based on sharing your information," Adams said. "This has been a technology that has been sort of slow to be adopted. Not many consumers are opting in for these programs."

This type of car insurance faces considerable opposition and so far under than 1% of drivers in the U.S. are utilizing it and nearly four in ten drivers say they would never consider pay-as-you-drive insurance, according to recent data from

The prime candidates to benefit from pay as you drive insurance would be consumers who have a short commute to work, conduct most of their driving during the day or drive occasionally, she said. Most of these programs give drivers discounts for driving below 12,000 to 15,000 miles annually.

Consumers should always consider both their privacy concerns along with how technology can be beneficial, Adams said.

"I think this is just a trend and we are going to see a lot more features of the car connected," she said. "People are uncertain about what it means as more companies are collecting and using data. Although consumer rights should be protected, we don't want to stifle innovation at the same time. It can benefit consumers if they adopt and try it."

Pay-as-you-drive car insurance can be a good option for consumers who live in cities or don't drive frequently or far each year. These types of policies -- such as "Snapshot" from Progressive, "Drivewise" from Allstate and "Drive Safe & Save" from State Farm -- gather information about consumers' driving habits to help determine how much drivers pay for car insurance.

A recent survey found that 58% don't even know what pay-as-you-drive car insurance is, and 35% say they would sign up only if they received a discount of 25% or more.

Consumers should check with their insurance carriers to determine the availability of a pay-as-you-drive insurance program and how each state regulates the program. California only allows insurance companies to track the amount of the mileage incurred by the consumer, not their speed.

If you drive under than 10,000 miles annually, MetroMile could be a good option for consumers, because it offers rates based solely on how many miles are driven, said Steve Pretre, CEO of MetroMile. Drivers pay a small base rate per month, plus a few cents per mile for the actual number of miles driven. For example, a typical customer might pay $30 per month plus 4 cents per mile driven. The number of miles driven is counted monthly using a device called the Metronome that plugs into the diagnostic port on your car and sends the data wirelessly.

--Written by Ellen Chang for MainStreet