Get more bang for your buck with pay-per-mile insurance - KFVS12 News & Weather Cape Girardeau, Carbondale, Poplar Bluff

Get more bang for your buck with pay-per-mile insurance

(Source: KFVS 12) (Source: KFVS 12)
(KFVS) -

You have to have car insurance if you want to legally drive, but if you don't drive that much, a pay-per-mile insurance plan may help you get more bang for your buck.

That's the idea behind Metromile. It's an insurance company that calculates what you owe by the actual miles you drive.

First you sign up online, giving the company basic information about you, the way you drive, and your vehicle.

Then Metromile calculates your base rate, which the company says averages about 30% of what you paid before with traditional car insurance. That's around $20, or so says Metromile.

Then you plug in what's called a "diagnostic port" into your car's onboard diagnostics (OBDII) port.  Most cars from 1996 and later have an OBDII port.

This tells Metromile how far you drive. Multiply those miles driven by the per mile rate, add it to the base price and you've got your monthly total.

Metromile says on average drivers save about 40%.

eSurance from Allstate is also trying out its own pay-per-mile offering, but right now it's only available in Oregon.

Other companies use a similar pay-as-you-drive model, instead of pay-per-mile.

Snapshot from Progressive uses a telematics device to monitor your car, and offers a potentially larger discount for people who drive less and very carefully. Progressive says ultra-cautious low-mileage drivers can save 30 percent or even more, but most drivers save less than that.

Insurance experts say these types of plans only work for people who don't drive very much, and that traditional insurance is best for most drivers.

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