For low-mileage drivers, these ongoing charges can seem unfair. Because drivers with similar profiles and vehicles pay similar amounts regardless of mileage, the lower-mileage drivers are effectively subsidizing those who drive further than them.

What happens to your monthly payment if you went on vacation that month and didn’t use your car?

Do you get a discount if you only use your car at weekends?

Nope.

Until now, that is.

A new breed of car insurance company is offering pay-per-mile plans. Companies like Metromile offer a lower base rate combined with a per-mile charge that results in cheaper car insurance for the 65% of U.S. drivers that drive fewer than 200 miles per month. These drivers could see their bills cut by up to 50%.

METROMILE SPOTLIGHT
InvestorMint Rating 1 2 3 4 5 3.5 out of 5 stars	Pricing: Base rate + per-mile rate Lost Car Locator: YES Free Street Cleaning Alerts: YES Get Started via Metromile secure site

3 Reasons Why Pay Per Mile Insurance Might Be Right For You

Thinking of making the switch? Here are three benefits of pay per mile insurance:

1. Lower Rates

This is the big one and why many low-mileage drivers make the switch. The lower base rate and per-mile charge may save you hundreds of dollars on your car insurance every year.

For example, the base rate might be $20 or $30, and then you pay an additional few cents per mile on top of that. Actual cost will vary depending upon your age, vehicle, and driving history.

2. Capped Limit

Some per-mile insurance providers, such as Metromile, cap the cost per day to a certain mileage. So, for example, if you were to drive more than 250 miles in one day, you’d only pay for the first 250.

This is great for low-mileage drivers who take the occasional long trip because it helps you keep your costs low.

3. Track Gas Spending

The systems that are used to track your mileage also provide valuable information on your gas spending, distance and speed that can help you understand how your driving impacts your insurance and gas costs.

Where Can You Find The Cheapest Car Insurance?

Metromile offers competitive pay-per-mile insurance rates for low mileage drivers who travel fewer than 10,000 miles per year.

Drivers who make the switch from a comparable fixed-rate service (for example, Geico or Progressive) could save up to $500 per year.

In addition to the benefits listed above (lower fees, capped limits, and tracked gas spending), Metromile also offers:

• Mobile App – find your car, track car health, and find a mechanic when you have a problem.
• Pet Injury Protection – first $1,000 of pet’s medical bills covered if your animal is hurt in an accident.
• Rental Reimbursement – Metromile covers up to $30 in rental costs per day for 30 days while your car is being repaired.
• Roadside Assistance – get roadside assistance if you have a problem with your car while driving.

The service works through a small Pulse device which is attached to your vehicle and used to automatically track how many miles you drive each day (and therefore how much you get charged).

The coverage includes similar options to competitors that offer fixed premiums:

• Comprehensive
• Collision
• Bodily Injury
• Property Damage
• Collisions with uninsured and underinsured motorists
• Medical payment coverage
• Deductible options include $250, $500, and $1,000

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3 Drawbacks to Cheap Car Insurance Options You Should Be Aware Of

No solution is perfect; here are three drawbacks to this type of cheap car insurance that you may want to consider before making the switch:

1. Not Available In Every State

Metromile is currently only available in CA, IL, NJ, OR, PA, VA & WA.

Car owners in other states will need to find an alternate solution or wait for the service to be rolled out in their area.

2. More Expensive Above 200 Miles Per Week

If your circumstances change and your mileage creeps above 200 miles per week, you may start paying more than you would on a per month basis. This may necessitate changing your policy again.

Drivers should be confident that their usage will not change radically in the next few months before they make the switch.

3. Variable Billing

Because your mileage varies, your billing does too. Some drivers find this uncomfortable because they’d rather budget a set amount per month, rather than getting a different value each month.

However, the fact that mileage is tracked should mean the billing isn’t a surprise – you know how much you drive and what it is going to cost you.

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Cheapest Car Insurance: The Bottom Line

For low-mileage drivers, services such as Metromile’s will give them cheaper car insurance compared to other fixed offering such as Geico, Progressive, AAA, and Allstate who charge a regular fixed monthly premium.

Metromile states that the average driver who travels 200 miles a week can save as much as $500 annually.

The bottom line is that this is worth checking out if you don’t drive much and are unsatisfied with your current premium. However, it should be noted that these pay-per-mile services can become more expensive than a fixed premium if the distance you drive increases substantially.

>> Need Renters Insurance? Check Out Lemonade

The article What Is The Cheapest Car Insurance? was originally posted on Investormint

The numbers don’t lie. AAA has been in business for over 115 years, boasts 55 million members and has 1,100 branches in North America.

And if you have ever been in need of emergency roadside assistance, AAA is synonymous with trustworthy coverage.

But these days, competition among auto insurance companies is rife and many provide roadside assistance so can you waive your AAA membership and save money?

Is AAA Membership Worth It?

Three AAA membership tiers exist but regardless of which one you choose, all of them come with these benefits:

AAA Membership Plans: Pricing

As a AAA member, you receive roadside assistance even if you are in someone else’s car.

In fact, you don’t even need to be a driver. As a passenger in someone else’s vehicle, you still qualify for roadside assistance.

Member perks also  include discounts at 100,000+ locations, including hotels, restaurants, and car repair.

But how do the three membership plans compare on price and benefits?

AAA Classic | $56 per year

• 5 Miles of free towing
• Free fuel delivery
• $50 car locksmith reimbursement

AAA Plus | $91 per year

• 100 Miles of free towing
• Free fuel and delivery
• $100 car locksmith reimbursement

AAA Premier | $119 per year

• 200 Miles of free towing
• Free fuel and delivery
• $150 car and home locksmith reimbursement

Compare AAA Membership Plans

AAA membership costs differ across the country but in Northern California, Nevada, and Utah the pricing and benefits are as follows:

A one-time enrollment fee is charged to new members, though AAA promos will waive the cost from time to time.

Is AAA Membership Right For You?

While the basic AAA benefits of free towing, free fuel delivery, free locksmith reimbursement, car rental discounts and hotel discounts are generous, the big “gotcha” with the AAA Classic plan is the towing limit of just 5 miles.

If you need towing assistance over a longer distance, you may be hit with a steep per mile charge thereafter which makes the plan unattractive unless you almost exclusively drive short distances.

AAA Towing: Best for Commuters

The AAA Plus plan has 20x more distance coverage (up to 100 miles) than the Classic Plan.

The Premier plan goes even further and covers you for up to 200 miles of towing assistance.

For most commuters, these two plans are a much better option than the Classic plan.

AAA Travel Benefits: Best for Travelers

The AAA Plus and AAA Premium plans are also a better a choice for frequent travelers.

Both trip interruption and lost baggage coverage are included in both plans but excluded in the AAA Classic plan.

However, if you have a credit card designed for frequent travelers like the Chase Sapphire Reserve^SM credit card, you enjoy these benefits too without taking any extra money out of pocket beyond the annual fee.

AAA Roadside Assistance: Best for Motorcyclists & RV Owners

If you own a motorbike or an RV, you will be left with no choice but to select the AAA Premium plan, which is the only plan that provides roadside assistance coverage for these vehicles.

The Premium Plan also includes perks like a free rental car for the day, windshield repair or replacement, and even emergency medical transportation.

Why Choose AAA Insurance Coverage?

Some AAA benefits are provided by auto insurance companies and even credit card companies, so why choose AAA insurance coverage?

If your car insurance policy is limited to liability coverage, you may be at risk in the event of a breakdown or accident because collision and comprehensive coverage is generally needed for roadside assistance.

You may also benefit from AAA membership if you have kids and plan to visit theme parks or go to the movie theaters where AAA discounts apply.

AAA discounts and AAA promo codes are available at over 100,000 locations so there is a decent chance of recouping your AAA membership fees from savings over the course of the year.

Perhaps the most compelling reason to choose AAA insurance coverage is the sweeping protection you receive no matter what car you are driving or seated in.

In the fine print of some auto insurance policies or even credit card terms and conditions when using rental cars, you will find coverage restrictions, such as driver-only coverage.

AAA covers you no matter what car you are in and regardless of whether you are driving or a passenger.

Is AAA Membership A Good Deal?

If you are pondering whether to sign up to AAA membership, it’s worth taking a few moments to think about what insurance coverage you may already have.

New car buyers may already be covered for roadside assistance by a manufacturer’s guarantee.

And roadside assistance is a complimentary benefit offered by many credit card providers too.

You may even receive it as part of your existing auto insurance policy. Or it may be available as an add-on.

AAA Alternatives: Allstate Motor Club®

Your auto insurance policy may also cover you for roadside assistance. For example, the Allstate Motor Club® provides roadside assistance for the equivalent of $1 per week.

You don’t even have to be an existing Allstate policyholder to qualify for the Roadside Advantage Plan, which includes:

• $100 roadside assistance benefit
• $500 arrest bond certificate
• $750 trip interruption benefit
• Car rental discounts
• Hotel discounts

AAA Alternatives: Geico Roadside Assistance

Whether you are stopped in your tracks by a flat tire or an engine breakdown, Geico roadside assistance is available at the touch of a button.

The Geico app makes it easy to request help on your mobile phone.

Emergency roadside service is available from Geico for $14 per year.

AAA Alternatives: State Farm Emergency Roadside Assistance

State Farm also provides emergency roadside assistance that covers:

• Towing to the repair facility
• Locksmith reimbursement
• Gas or oil delivery
• Jumpstart services
• Tire changes

Best Roadside Assistance Plans

We compared some of the best roadside assistance plans side-by-side with AAA. Here are the results:

Summary: Is AAA Worth it?

So is AAA worth it? If you want protection no matter what car you are driving or seated in, AAA membership is worth the cost.

Drivers with liability coverage only will benefit from AAA roadside assistance too. Otherwise, you may need to purchase collision and comprehensive insurance for an added cost.

Plus, you can purchase renters insurance, life insurance, home insurance, and auto insurance through AAA at preferred rates.

And you receive AAA discounts at 100,000 locations in North America when you become a AAA member.

The bottom line is you could probably find coverage options for all the services provided by AAA elsewhere but if you want peace of mind that all your coverage is under one umbrella, AAA is hard to beat.

Extra, Extra! Is AAA In All States?

Is AAA in all states?

The short answer is yes, the American Automobile Association is a federation of motor clubs throughout North America, including:

Simply Google “AAA near me” or “AAA phone number” to find the nearest AAA location to you.

Do you have a AAA membership? Have you taken advantage of AAA discounts or AAA travel? Share your experiences with us, we would love to hear from you.

>> Need Used Car Financing? Check Out Carvana

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>> Need An Emergency Auto Loan? Check Out Finova

The article Is AAA Worth It? was originally posted on Investormint