Tuesday, October 2, 2007

Insurance by the day or the mile

OK, so you own a car. Fine; so do I. Let’s say that you want to cut back on how much you drive. Great; so do I. It saves gas, wear-and-tear on the vehicle and some other costs.

But there are two areas where it makes no difference.

Your insurance is largely a yearly price, with only a small reduction if you drive less. But what if it was based entirely on your mileage? Rather than paying for the year, you would pay by the mile. Every time that you start up the car, it would cost you more. Now, maybe you would think twice of driving to work or be more willing to carpool, knowing that it could save you a couple of bucks—the cost of public transit or your share of the gas money in the carpool. Maybe you would join Flexcar and use their service.

Imagine if the state tax on your vehicle was tied, not to the value of your car, but to the number of miles actually driven. Or at least, some part of the tax could be tied to the miles. Or perhaps, a penalty would be assessed for truly excessive driving of personal cars.

There are obvious problems with such a plan; it would take a while to work out the bugs But if we are serious about reducing traffic and smog and all of the rest, we have to start somewhere and probably try a couple of different fronts.

No comments: