Pay-as-you-go car insurance is a relatively new type of auto insurance coverage born from the need to keep up with changeable consumer needs and demands during unprecedented challenging times. The concept of pay-as-you-go car coverage is based on saving you money, but is pay-as-you-go car insurance legit? 

The answer to this question is ultimately affirmative although the level of benefits you receive from this type of coverage depends on your situation and the state in which you live. Pay-as-you-go car insurance is quite valuable to many drivers looking for ways to save money under qualified conditions.

Drivers commuting only short distances to work and who also maintain clean driving records might see the most benefits from purchasing pay-as-you-go car insurance. Many insurance companies have minimum-mileage insurance premium rates. 

Using an online car insurance price comparison tool it is possible to discover which companies have the more restrictive minimum-mileage rating requirements. For example, some companies impose an 8,500/year minimum mileage rating on your policy. If you drive less than 8,500 miles per year you are paying for more car insurance than you really need. Purchasing a pay-as-you-go car insurance policy helps you pay for only the insurance you need to operate your vehicle accordingly and nothing more.

Are there drawbacks to pay-as-you-go car insurance? It is necessary to compare auto insurance rates for these types of policies between various companies offering the service. It is also necessary to compare the price of installing the technological device in your car required to make this type of insurance coverage work. 

State Farm uses a Telematics device to track and record your driving habits and mileage in order to offer you discounts. Similar technology is used for pay-as-you-go insurance policies. A device is installed into your vehicle. You are responsible for paying for the installation costs. The device tracks and records your location, mileage and safe-driving habits. 

If you drive over the mileage allowance as dictated by your pay-as-you-go coverage terms your rates increase significantly. If you stay under the mileage allowance as dictated by your pay-as-you-go coverage terms you save a lot of money on car insurance each year. Is pay-as-you-go car insurance legit? It is legit but the costs of installing the newer tracking technology might negate your savings. It is crucial to compare auto quotes to get the best deal on this type of modern car insurance coverage available to you today.