Letting an insurance company put a tracking device in your car seems a bit unnerving to some people. That palm-sized device may seem intrusive, but it can save as much as 30% on insurance premiums. A recent Brookings Institution study concluded that two-thirds of households would see their premiums reduced by about 28%.
Several large insurance companies offer pay-as-you-drive insurance programs. How they gather the information is different. Progressive and Allstate use a device that plugs into your diagnostic port, while State Farm and GMAC Insurance use OnStar. No matter how the information is collected, it is used to determine your personal driving habits. Information like how many miles you drive, what time of day you drive the most, acceleration, and braking habits are used to set your premiums.
Whether you need Honda Civic insurance or Dodge Charger insurance, the average discount is around the 15% mark. You have to drive pretty infrequently in order to receive the 30% discount, but it is achievable. Oh, in case you are wondering, the companies will not increase your premium based on the information that they gather.