How Pay-per-Use Auto Insurance helps you save

Pay-as-you-go auto insurance can be more affordable and flexible. Understand what it offers and its differences in relation to traditional insurance.

Technology has brought ease to everyday life and allowed us to rethink the way services are offered.

It is now possible to find out about the services, ask questions and hire online. With just a few clicks you can get what you want and often without any loyalty.

The insurance sector also needed to evolve. Traditional insurance no longer meets needs and in some cases has a high value. As an alternative, pay-per-use car insurance emerged.

It is also known as pay per use and is starting to spread in Brazil.

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How does pay-as-you-go auto insurance work?

The name of the insurance already gives a good indication of how it works. In short, the person will pay for the amount they use the service.

Depending on the company offering the service, there may be some variations in how it works.

You pay a low subscription fee to access the insurance. It can give the policyholder a limited number of kilometers to use per month.

If the limit is exceeded, there is no problem. The person continues to drive the car, but they will be charged a few cents per excess kilometer.

Another possibility is prepaid auto insurance services. There is no subscription to them, but you need to make a minimum top-up to start using them.

In these two types of service, usage control is done through the application and equipment installed in the vehicle.

When you leave with your car, you need to turn on your insurance for the coverage to start working and when you return home, just turn it off, all in the app.

Are these insurances reliable?

Of course, before taking out insurance, it is always recommended to check the reputation of the insurance company and learn a little about its history.

The good news is that SUSEP authorizes and regulates this type of product, so it follows very specific rules. If the insurance company is authorized to operate this service and has good recommendations, you can hire it without fear.

Is it possible to save with pay per use insurance?

Here's the big question. If it is possible to save on pay-as-you-go auto insurance.

It may have a monthly fee, but this is usually much lower than traditional insurance. In this regard, it is possible to save a lot of money, the difference can be quite big.

Regarding coverage, they can be the same as traditional insurance covering theft, theft, collision, glass repairs, moral damage, 24-hour assistance and others. It is possible to choose the package with the coverage that will be contracted.

If you think about the amounts that will be paid and the coverage available, we can say that it is possible to save on pay-per-use auto insurance.

Regarding the deductible in the case of a partial claim, this may vary. There are companies that charge around 4% of the vehicle's value, while others charge 8%. This is a point that will require attention so as not to weigh on the budget.

An advantage of pay-per-use insurance is that it usually does not have a loyalty contract, which means that cancellation can be made at any time without the need to pay fees. Very different from traditional insurance companies that usually insure the person for 12 months.

If the insurance is taken out for those who use their car a little and are used to turning the service on and off correctly, it can be very worthwhile. It is possible to have good savings compared to traditional insurance.

When is it not worth it?

Pay-per-use auto insurance will not always be an interesting choice. It may not provide some coverage, for example, shielding. In this case, if an accident occurs, the insured would have to bear the expenses.

It may also be that the vehicle is not accepted because it contains modifications or specifications.

An important point to consider is the values. It is necessary to remember that there is a mileage limit and if it is exceeded, the excess will be charged. For those who use their vehicle a lot and travel long distances daily, this may not be the best choice.

We can summarize by saying that this type of insurance is not worth it when the car is not accepted, does not have the expected coverage or the values ​​are high.

The best way to compare traditional insurance and pay-per-use auto insurance is to quote and purchase prices.

Pay-per-use car insurance should not replace traditional insurance, but it is an alternative for those who use their car little and are looking for a more affordable and flexible option.