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Pay as You Drive (PAYD)

Pay-as-you-drive auto insurance (PAYD) is a type of automobile insurance based on how much the policyholder drives the vehicle during the policy period. Also called insurance variabilization, mileage-based insurance, distance-based vehicle insurance, and per-mile premiums, pay-as-you-drive auto insurance is a simple concept that basically says that the more you drive, the more you pay and the less you drive, the less you pay. Popular with environmental groups because it encourages drivers to drive less, pay-as-you-drive auto insurance not only depends on how much you drive, but also when and where you drive (this varies with different insurers).Pay-as-you-drive auto insurance providers monitor drivers via a tracking device that is installed in the vehicle. In addition to tracking driver’s usage, at advanced levels, this device also allows insurance providers to track risk according to factors such as speed or cell phone use while driving. Much like regular insurance, with pay-as-you-drive auto insurance, higher-risk drivers will pay more for usage than lower-risk drivers. The average per mile rate for pay-as-you-drive auto insurance, however, is around $0.06 per mile.

Some major benefits of pay-as-you-drive auto insurance include: 

• Consumer Savings
• Increased Affordability
• Reduced Uninsured Driving
• Increased Safety
• Reduced Vehicle Travel
• Increased Fairness.

AutoCarInsurance.org provides you with multiple free quotes on pay-as-you-drive auto insurance. Begin by filling your zip code in the box above.