Tag Archives: insurance costs

Technology is Taxing. So is Driving.

There’s a great new technology in auto insurance where drivers can pay per mile, which rewards lower mileage driving with lower insurance costs, and is surely less boring than insurance-as-usual. Using a device that plugs into the car, data is sent  out to one of these entrepreneurial insurance companies, such as Metromile, to track the actual quantity of miles driven by the insured car, rewarding your good work. In paying for only what is used, infrequent drivers can save some serious money and avoid paying what the “average” user “like” them pays. But you’re better than average, right? Sounds like a great business model – use technology to help people save money on a product they use infrequently but must pay for anyway!

We’re giving it a test drive this month to see how many miles we actually drive. We’ll compare the cost to our current traditional auto insurance and I expect to save a lot. The small device plugs into a port I didn’t even know existed, located below the steering column. I now know I’m averaging about 8 miles a day, having only driven over 20 miles on 6 separate occasions.

But hey, that’s a great idea and so the government is ready to reach between your legs and plug one of these into your car to generate tax revenue! Unsatisfied with the nation’s growing trend towards driving fewer miles (which means less gas purchased and fewer tax dollars paid), the government is looking for ways to make those who pay less – pay more.

I’d like to think most people try to consider the environment before they make choices (some think about it more than others, but it helps when more green equals more $green$). Big Government certainly thinks about the environment and tells us to play nice and drive less. But penalizing drivers who choose to drive high-mileage hybrids and electric cars (and who pay fewer or no gas taxes) with a new kind of tax that removes all the benefits by collecting taxes on a per mile basis is not going to do a lot for promoting gas efficient cars and economical use of resources. Recently the Obama administration mandated new regulations in fuel efficiency “with the goal of slashing greenhouse gas emissions and fuel consumption.” They even said that “families will save money.” Save the world and save money! Sounds nice, but we knew it was too good to be true. Start riding your bike before they tax the bike lane.

Paying for what you use is better than paying for the average of what everyone uses, if you’re going to have to fork over your first fruits anyway. So much for trying to save money. We might as well stay home and not go anywhere. Until recently we didn’t have a car, so I wouldn’t have cared. I won’t be surprised if they charge a fee, penalty, or “tax” for not participating.