Now that we are not taking the car as much as before, why not hire car insurance in which we only pay according to what we use? There is the option of hiring car insurance by kilometers, which is focused on users who take the car on rare occasions. Below we give you more details about this type of insurance.
How does car insurance based on kilometers traveled work?
Mileage-based car insurance works very differently from traditional car insurance, in which you pay an annual premium regardless of whether you use the car or leave it parked most of the time.
Car insurance by kilometers has a prepayment system through which you previously contract the coverage depending on the kilometers you are going to drive and you buy the so-called "kilometers bonds", with which you have coverage until you drive the total kilometers contracted.
How do they measure the kilometers we travel? By means of an electronic device that policyholders must install in the car. The car insurance premium will increase as the number of kilometers contracted increases, although other characteristics are also taken into account.
Advantages of car insurance based on kilometers traveled
Let's take a look at some of the advantages of taking out car insurance based on the number of kilometers traveled:
- We only pay according to the cost of the car
While the rest of the car insurances suppose a "flat rate", the car insurance according to the kilometers implies paying only for what we use the vehicle. This means that we have considerable savings if we do not drive our car much.
- Allows greater control over the kilometers traveled
Normally, the more kilometers we drive with the car, the more expenses will start to arise to maintain it due to the use we make of it, such as possible repairs.
The fact that the insurance premium we pay is also linked to the use of the car means that we have greater control, that we pay more attention to the kilometers the vehicle has been driven and therefore the useful life we want it to have, that is to say, the years we still want it to last without buying another one.
Disadvantages of car insurance according to the number of kilometers traveled
We can also highlight a couple of disadvantages of car insurance according to the kilometers traveled:
- You have to be aware of the kilometers traveled.
Obviously, you have to be aware of the kilometers you are traveling by the car because as soon as you run out of the bonus you have contracted with the insurer you have no coverage. For this reason, if you take the car a lot, this type of insurance does not benefit you.
In addition, if you are going to make a trip that you do not know exactly how far it will go, because not everything is planned, and you are close to the limit of the coverage, you should contact your insurer again to extend the policy with additional bonds.
If you fail in your forecasts, it can be expensive
If you foresaw that during the next year you were not going to take the car much, you agree with the insurer the annual mileage bonus, and suddenly something unexpected happens, such as a change of destination at work, the insurance can be very expensive, and you would have been better off taking out a traditional "flat rate" insurance policy.
Traditional car insurance or mileage-based car insurance?
In principle, and as can be deduced, car insurance based on kilometers traveled will be much more economical if we do not use the car very assiduously and therefore do not travel many kilometers per year. This could be the case of people who go to work by public transport and only drive occasionally on weekends.
This would be the "general rule", like everything else, we must look at the characteristics of each insurance and see what is the annual use we give to our car.
From there, it would be necessary to compare if the annual bonuses of some insurance correspond to what we usually drive with our car and see if it would be more economical compared to a traditional or "flat rate" insurance.
What about you, do you use your car infrequently and would you dare to take out an insurance policy based on mileage?