The premiums you pay on your auto insurance are usually based on your age, gender, and where you live. Pay As You Drive insurance however is different. It’s based on the number of miles you drive. Drive fewer miles, pay lower premiums.

The obvious advantage of Pay As You Drive, then, is cost. Since Pay As You Drive premiums are computed on the basis of how many miles the vehicle is driven, it is extremely easy to reduce the monthly insurance bill. Simply reduce the number of miles driven. Not only does this save money on the insurance bill, it also means less on gas and maintenance and repair. The fewer miles driven, the longer the vehicle lasts. It may be possible to keep the vehicle long after that last car payment is made, and in our tough economy, who can’t find things to do with the money that otherwise would be spent on a car payment?

The less obvious advantage of Pay As You Drive coverage is that you can tailor your program to your specific driving needs. Premiums under these plans are either computed on the basis of miles driven, or on the basis of hours driven. You can choose a Pay As You Drive policy that focuses on total miles, or total hours in a specific time period, such as six months. Pay As You Drive coverage offers you the flexibility and freedom you need to choose exactly the coverage you need, and to get it at a lower cost as you economize.

Pay As You Drive insurance offers an incentive to drive fewer miles, and the less you drive, the less likely you are to get into an accident. Low mileage drivers tend to be more cautious and focused behind the wheel as well.

Pay As You Drive plans require mileage monitoring, but there are several options. You can opt for certified odometer readings, the same kind as performed when you have a safety inspection. Or you can have a GPS monitor installed into your car, which allows the computer simply to upload data to the insurer. If you choose to use GPS, the initial cost of the monitor will probably be offset by the reduction in your premiums, making future coverage less expensive and hassle-free.

The Brookings Institute found that two-thirds of American households would save an average of $270 per year with Pay As You Drive. In the current economic situation, that is welcome news.

Moreover, not only does Pay As You Drive save you money, it protects the environment. Fewer vehicles on the streets and highways means a reduction in greenhouse gas emissions. Less traffic also means fewer traffic jams and less congestion, and less time wasted sitting in the car.

There are plenty of advantages for Pay As You Drive insurance. Contact a qualified insurance provider for more detailed information on an insurance plan that best suits your driving needs.

Tom Martens is the content syndication coordinator for Carinsurancesa.co.za. South Arica?s leading car insurance portal.