Is there such a thing as Per Mile car insurance...
July 22, 2013 2:27 PM   Subscribe

...That actually exists right now, and isn't just some thing in a trial state only available in 1-2 small locations? I'm paying a lot for a car i barely drive.

I realize i should probably be counting my blessings here since i'm a 23 year old male only paying a little bit over $80 a month(so, about $1000 a year) to geico, but that's still frankly ridiculous for a car that i drive on average about once a week, and put maybe 100 miles or less on a month.(with the odd month i go on a road trip or drive to a friends place in a nearby town).

Essentially, i feel like i'm getting dinged for the insurance cost of someone who commutes to work every day and drives a lot without actually doing that. It feels like splitting the water bill with two other roommates who shower twice a day and do laundry 4 times a week when you only shower twice a week and do laundry twice a month. See what i'm getting at here?

I've heard of per-mile "pay only when you use it" plans, but only as a trial being tested out in one city or county, and never anywhere near me. I also looked in to "collector insurance" like Hagerty since the car is from the 60s and they quoted me at about $250 a year, but they won't serve you unless you own another "daily driver" vehicle that's insured by someone else... even if you barely drive your car.

I also looked in to car2go/zipcar type stuff, but those would be a huge cash burn for the usage scenarios i tend to do. Which are a mix between going out of town often overnight in which car2go and zipcar bill you continiously, running errands/moving music gear, and cruising around just for the hell of it on a nice day. Also, i really like my car and don't want to be driven(HARHAR) to get rid of it by this crappy perpetual cost. I'm already paying for parking since my building has none, and in combination with this it's a pretty damn big ding every month for essentially having the privilege of being able to drive when i'd like, and really when it's crunch time and i have to get somewhere quickly(which could be the difference between walking, a bus ride, a transfer, a bus ride, and walking in 1.5 hours or driving 15 minutes) or move XYZ item from location A to location B that i couldn't do any other way.

Why isn't there just some service with an iPhone app that i can tap and say "i'm driving my car today" and be billed for that day? What are my options here? I'm dreaming about a car2go type service that does nothing but insure my car.

Also note, although i put it in the "travel location" field, that this is in Seattle, WA.
posted by emptythought to Travel & Transportation around Seattle, WA (18 answers total) 1 user marked this as a favorite
Best answer: You can do a Snapshot trial with Progressive; use a tracking device for a month and see how much they'd charge you based on mileage, etc.

FWIW, your insurance rate is insanely low.
posted by munyeca at 2:38 PM on July 22, 2013 [3 favorites]

Have you called your insurance company and told them of your plight?

I feel like, when I made initial contact with my car insurance company, one of the things they wanted to know is how many miles I'd be putting on my car, per year. I don't know exactly how that affected rates, but if you are REALLY barely driving it at all, miles wise, you could see what they can do.

You should probably have a good guesstimate of your annual mileage ready, and it's probably best to be realistic about it. I mean, you're basically asking your insurance company to cut you a deal. It won't look good for you if you get that deal through assumptions and bad math.
posted by Sara C. at 2:39 PM on July 22, 2013

Although I was in California, not Washington, a discount was offered for low miles. I was using State Farm, which is not a discount insurance company.
posted by janey47 at 2:41 PM on July 22, 2013

Some (most?) insurance companies offer a low-use discount (one of the standard questions on a vehicle insurance application is how many miles you drive annually). So you should definitely contact Geico and make sure they're applying that.
posted by drlith at 2:43 PM on July 22, 2013

You might also have a look at your deductibles, and your comprehensive coverage (if you have such), and if you can afford the exposure, raise the deductibles to policy maximums (say from the normal $500 to $1000 or more). If your car is more than 5 years old, or high mileage, consider dropping comprehensive, if you could afford to replace it if totaled, and if you can financially handle common comprehensive claims like auto glass.

The main reason you can't buy car insurance on a "daily" basis as you'd like, is that, in most states, maintaining insurance is a requirement for maintaining valid vehicle registration. When you don't "have" insurance, you're not supposed to have the vehicle registered for use on public roads. It's not something that is just in the purview of insurance companies, alone.
posted by paulsc at 2:46 PM on July 22, 2013 [1 favorite]

Have you done a side-by-side comparison of what you're currently paying (insurance, parking, gas, repairs) and your current usage vs. Zipcar? Their rates seem like, depending on how much overnight you do, it would still be cheaper. You could go out of town overnight 1-2 nights a month and probably still come out ahead with their $50/month plan, since you'd be probably driving enough to make that 7 hours per month worth it for the discount.
posted by rabbitrabbit at 2:58 PM on July 22, 2013 [1 favorite]

Also, many factors beyond your age, sex, driving record, annual mileage and address/garaging patterns play into modern car insurance rate calculations. Your estimated net worth, credit rating, length of employment, length of being a customer, banking info, new credit situations, new recurring expenses, etc. all tend to show up in regularly traded consumer information databases. Insurance companies are looking harder than ever to reduce insurance fraud themselves, by "rating out" customers with unusual or recently vastly changed life circumstances, including those who might be a target of fraudsters, who can even stage accidents with people likely to settle claims out of court, based on their economic profiles. GEICO is a wholly owned subsidiary of Warren Buffet's Berkshire Hathaway, and, believe me, they have great computer pricing models and customer databases. Personal opinion: You're playing against the minions of the Smartest Man in American Finance, when you're looking for a deal as a GEICO customer.

Although I'm not anywhere near your age, or Zip code, I pay about $56 a month (prepaid 6 months at a time), for a 13 year old Chevy truck I drive about 5,000 miles a year, so lower rates can be had, but you've got to be in a position to get them, on a number of fronts. Good luck with your quest for lower rates, and do report back to the thread what you did, if you get them!
posted by paulsc at 3:09 PM on July 22, 2013

For what it's worth, I'm also a Geico customer with extremely low mileage (I bottomed out around 2500 miles in a year.) As far as I've been able to determine, there's no low-mileage discount to be had, and the insurance companies that did offer such a discount still charged me more than Geico for the same coverage. Your mileage, of course, may vary - no pun intended.
posted by Tomorrowful at 3:15 PM on July 22, 2013

Response by poster: You might also have a look at your deductibles, and your comprehensive coverage (if you have such), and if you can afford the exposure, raise the deductibles to policy maximums (say from the normal $500 to $1000 or more). If your car is more than 5 years old, or high mileage, consider dropping comprehensive, if you could afford to replace it if totaled, and if you can financially handle common comprehensive claims like auto glass.

I'd like to note that this is for liability only, and that i wasn't really interested in comprehensive then(or now) as i get the distinct feeling that any accident which caused any sort of real damage would just cause them to total the car. I've seen perfectly restored examples of this car going for 8 grand, and decent ones going for 2-4k. The few body bits/etc i've had to replace over the past year have been expensive and extremely hard to source since it's a fairly unusual trim model of a fairly unusual car with lots of specific to that year and trim body/trim/detail bits(it's actually the same "II" trim, model, and year as the red one here!). The deductible and such were set at whatever the minimums/highest bars they could be set at was. The only modification i made was raising the amount of liability coverage to something like triple the minimum since it was only an extra buck or two a month.

They've dropped my rate almost $20 since i first got insurance a year and a half ago. And similarly, i've had the experience tomorrowful had that every other company wanted to charge me more money for less coverage.

This may very well be the cheapest it gets, but i was just dreaming of cheaper.
posted by emptythought at 3:20 PM on July 22, 2013

Your '60s vintage Plymouth Belvedere won't work with Progressive's Snapshot. It needs an OBD-II port, which is only on vehicles made since the mid-90s.

I use State Farm and am in a program called Drive Safe & Save. I report my odometer to them every 6 months or so and they apply a discount to my bill (about $100 on a 6-month policy for a car I drive about 5000 miles/year).

Unfortunately, however, the one thing that will reduce insurance rates for you will be turning 25, or getting married.
posted by zsazsa at 3:38 PM on July 22, 2013

Do you own any shares of Berkshire Hathaway? If so, GEICO will give you a discount. B shares are currently under $120 (they split recently so you no longer need three grand to invest). Call up and ask for an "affiliation discount" since you are a Berkshire stockholder. If they ask, tell them they are in "street name" (means your broker holds them for you so they'll be in the broker's name, not yours). Discount used to be about 8%.

This is if you don't have any other discounts. If you do, you just get the biggest.

N.B. They can't actually check to see if you own shares if your broker holds them... your broker holds lots of shares of Berkshire for lots of people.
posted by kindall at 3:43 PM on July 22, 2013 [1 favorite]

One other to thing to note about insurance for a vehicle like yours: because it's probably body-on-frame construction, it tends to do more damage in collisions with modern unibody cars with crumple zones than would similar modern cars of equivalent weight/dimensions. The old body-on-frame cars just don't have the engineered "give" of modern car's crumple zones, and the cost of repairing modern cars they hit tends to be higher. So, a lot of companies with aggressive liability rates simply don't offer coverage for vehicles of this age.

However, Berkshire Hathaway owns not only GEICO, and other retail insurance companies, but also General Re, which happens to be, on any given day as the world's financial markets go, the world's biggest re-insurance company. Re-insurers are the people that insurance companies "lay off" their unusual risks to, and that allow them to temporarily remain in lines of business that have hard to calculate risk exposures.

So, you may not have a lot of other insurer choices for that vehicle, at any price. Because of GEICO's relationship with General Re, you may have already landed with one of the only companies that will insure the vehicle, at a decent rate.
posted by paulsc at 3:56 PM on July 22, 2013

I pay about $160 per 6 months ($27/mo) for insuring my 1980 vehicle that gets driven once a week 12 miles. Progressive, with about the cheapest liability-only insurance; I picked their lowest mileage option; was something like 3k or 5k a year, quite a few more than my usual 500. Maybe it is your age? I'm not that much older than you.
posted by flimflam at 4:37 PM on July 22, 2013

When I stopped using my car for commuting, I called State Farm and had it reclassified as a "pleasure vehicle". Unlike collector car insurance, there's no requirement to own another daily driver.
posted by djb at 8:15 PM on July 22, 2013

That rate, for a 23 year old male, is pretty darn good. You'll get discounts as you hit milestone birthdays.

Plus, the calculations for insurance are not always first-order common sense. (Meaning, they make sense when viewed in their totality, but not necessarily individually.) I would imagine that, somewhere deep in the actuarial tables, there is data showing that people who drive fewer miles end up having higher accident rates per mile, and thus there really aren't any discounts to be had beyond a certain point.

I would also imagine that the calculations show that there is very little difference in accident rates between someone who drives 4 miles a day, versus someone who just drives 28 miles every Sunday. So even if the pricing structure were set up as a per mile or per day thing, you'd end up paying about the same amount.

Lastly, there are certain risks that simply owning a car entail. Someone could bump your car in the parking lot and cause it to damage someone's property. Usually by default, the car that actually does the damage is liable for any damages. Your insurance company would likely sue the other car owner to recover the money, but to them, a claim is a claim. No matter who ultimately pays, an active claim costs them money. So there is also that sort of "background radiation" of risk that isn't dependent on miles driven.
posted by gjc at 4:58 AM on July 23, 2013

So, how much total, annually, are you spending on your car?

$1000 insurance
$1000 parking?
$500 gas?
$500 maintenance?

$3000 a year would get you about 35 - 40 nights (24 hour trips) or 300 hours (at $10 / hour estimate) a year in a Zipcar. I've been a Zipcar member since 2004 and making the adjustment to having to pay per use is a hurdle to get over, for sure. Don't forget that gas and insurance are included.

Some questions for you:
Do you live in a neighborhood with a lot of cars around?
How far in advance do you plan your trips, especially the longer ones?
Do you belong to any groups or does your job or school give you a Zipcar discount?

As for insurance, definitely ask about low mileage and/or leisure car rates. But realistically you might not be able to get much lower. It can't hurt to ask!
posted by reddot at 5:44 AM on July 23, 2013 [1 favorite]

N.B. They can't actually check to see if you own shares if your broker holds them...

Yeah, I would really recommend NOT lying about things to your insurance company. That can be insurance fraud which can come back to bite you should you ever need to make a claim.
posted by Juffo-Wup at 11:23 AM on July 23, 2013

where do you live? There are insurance companies that insurance drivers who do not drive very much.

tscdirect is one example. they are in the NYC metro area.
posted by majortom1981 at 11:41 AM on July 23, 2013

« Older Is it worth it to move to ATL?   |   Help me stop worrying about drinking wine before I... Newer »
This thread is closed to new comments.