Drive Less, Pay Less Car Insurance

More than 6 million people nationwide rely on public transit to get to work, which means if they own a car it spends a lot of time parked in the garage. People who drive less stand less chance of getting into accidents and therefore cost insurers less money. Yet, historically, these drivers have been expected to pay the same amount for car insurance as everyone else. Not anymore.

Progressive Corp. and GMAC Insurance are now offering discounted rates to customers who log fewer miles, according to Lavonne Kuykendall of The Wall Street Journal. The premise of the programs is simple: The less you drive, the more you save. The catch is that the plans aren't available to all drivers.

GMAC's plan is being offered in 34 states. To participate you have to own a GM car that comes equipped with the OnStar navigation system. It verifies your mileage by automatically reporting the car's odometer reading at the beginning and end of your policy term. Motorists who drive less than 2,500 miles a term can save as much as 54% on their bills, according to Kuykendall.

You don't have to own a GM car to participate in Progressive's TripSense plan, but you do have to live in Minnesota, Michigan or Oregon, and you have to be willing to install a small device in your car to track your miles. Unlike with GMAC's program, customers must download and report their own miles to receive discounts. Progressive also tracks other driving habits to assess your risk. The reward, reports Kuykendall: Users can shave 5%-25% off their bills by using TripSense.

Sound good? Consumer advocates say it is, as long as you don't mind insurers gathering information about your driving behavior.