The pandemic has changed the driving habits of many people, especially those working from home. According to a recent study, more than one in four workers (26.7%) now work remotely, five times more than before the pandemic (5.7%). 92% of these employees work remotely at least one day a week. Overall, more than two in three American workers (68%) would prefer to be remote altogether.
Even with the easing of pandemic restrictions, many drivers are driving less than before. As a result, more drivers switched to pay-per-mile car insurance, saving them hundreds of dollars on car insurance.
What is car insurance per kilometer?
Pay-per-mile car insurance has become more popular with drivers since the monthly car premium is based on the number of miles you drive, as opposed to a fixed monthly amount. Car insurance companies offer the same coverage as a traditional policy, except you pay a low base rate plus several pennies for every mile you drive. Companies can now offer more targeted and cheaper policies to meet driver demands.
Insurance companies are able to track the number of miles you drive primarily through “telematics” technology which monitors vehicles in real time via GPS. Telematics can be built into a car like a Tesla, or require you to plug a device into your car’s diagnostic dashboard. Some insurers require you to connect their mobile apps to the devices.
The fare for a pay-per-mile policy usually consists of two parts: a base fare and a variable fare (cost per mile). The base rate is based on factors such as the driver’s gender, age, location and driving history. The variable part of the rate is based on the kilometers actually travelled. Your monthly premium will vary from month to month.
How much does car insurance cost per mile?
The cost of car insurance per kilometer varies depending on the car insurer and the driver. Pay per mile can be 30% to 50% cheaper if you are a low mileage driver. A 35-year-old single man with a clean driving record driving 300 miles a month will pay around $80 a month, compared to $133 for a traditional policy. This is a savings of $53 per month, or $636 per year. The base rate for a pay-per-kilometre auto insurance policy for the same driver can range from $45 to $60 per month. The variable rate can range from $0.06 to $0.07 per mile flown.
Should you buy a kilometer insurance policy?
This type of auto insurance is best suited for people who don’t drive a lot. In the example above, the pay-per-mile policy is approximately 40% cheaper than a traditional policy for that particular month. The break-even point is around 1,000 miles. A driver who drives more than that on a monthly basis would be better off using a traditional policy.
Per-mile insurance is ideal for drivers with low mileage – those who work from or near home, use public transport, retirees who don’t drive often, students who don’t commute, and those who have multiple vehicles . After getting your quote from the insurance company, compare a traditional policy and a pay-per-mile policy to see which gives you the most savings. It is important to take into account the long road journeys that you can make at certain times of the year.
Many drivers have permanently changed their driving behavior due to the pandemic, especially those who are now working from home. People who don’t drive a lot may be paying too much for car insurance. Since drivers can now customize their car insurance coverage based on the number of miles they drive, they can potentially save hundreds of dollars.
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