Temporary Car Insurance and Pay As You Go Plans

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UPDATED: Jun 29, 2022

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Written By: Jeffrey JohnsonUPDATED: Jun 29, 2022Fact Checked

It is becoming increasingly common for car insurance companies to offer short term car insurance options for customers who are not interested in a regular car insurance policy. If you are in a situation where you want to save money on car insurance by only purchasing it for limited time or certain circumstances, then you can get a quote for temporary car insurance or a mileage based plan.

TIP: When shopping for short term car insurance, you should shop as you would for normal car insurance: explore several companies, compare car insurance quotes, and take advantage of any car insurance discounts that are available to you.

Temporary Car Insurance

Temporary car insurance can be a good option for individuals who only plan on driving a particular vehicle for a short period of time. Temporary car insurance plans typically last anywhere from 1 – 6 months, and will usually provide the minimum liability coverage required to keep your vehicle on the road over the course of the policy. There are a number of situations where temporary car insurance may be helpful:

  • You plan on quickly selling the vehicle
  • You are borrowing someone’s car for an extended period of time
  • Someone else is temporarily driving your car
  • You just purchased a car and haven’t sorted out the insurance details yet
  • Your financial future is uncertain and you cannot commit to a long term insurance contract

Temporary car insurance is a good solution when you need insurance to drive, but do not have a definite long term plan for the vehicle, or don’t intend to have the vehicle for long. You can get temporary auto insurance quotes from several insurance companies.

TIP: Temporary car insurance is only a money saving technique if you are not committed to paying for the insurance for a long period of time. If you plan on insuring your car for a long time, then temporary car insurance is the more expensive option as it will likely carry higher rates for less coverage.

Pay As You Go Car Insurance

Pay as you go car insurance can be an ideal policy for a driver looking to save money who doesn’t need to drive their vehicle regularly. Pay as you go insurance offers what is essentially a mileage discount by charging an insurance rate based on how many miles the car is driven. This is accomplished by placing a small device in your car that tracks your mileage, what time of day you are driving, and how often you slam on the brakes. The device is not a GPS, and cannot track your location. Rather, it is designed to track your distance and identify times when you may be engaged in high risk driving (sudden stops or late night driving) and charge you insurance rates accordingly.

Pay as you go car insurance is not a money saving technique for every person. It is ideal for people who drive under 12,000 – 15,000 miles a year such as:

  • Someone in an urban area who uses public transportation
  • Retirees who only make short trips
  • People who work from home, or do not work that only use the car for errands or short trips
  • People who have a secondary car that they would like to insure
  • Young drivers who want to save some money on car insurance

Your car insurance company may not offer pay as you go insurance. If you feel that this type of insurance is right for you, you may be able to cancel your auto insurance policy and shop for a new pay as you go car insurance plan.

To find the right car insurance policy for your driving needs and budget, click here to use the Free Advice quote center.

For more information about getting the right car insurance policy to fit your needs, check out the following articles:

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Editorial Guidelines: We are a free online resource for anyone interested in learning more about legal topics and insurance. Our goal is to be an objective, third-party resource for everything legal and insurance related. We update our site regularly, and all content is reviewed by experts.

Jeffrey Johnson is a legal writer with a focus on personal injury. He has worked on personal injury and sovereign immunity litigation in addition to experience in family, estate, and criminal law. He earned a J.D. from the University of Baltimore and has worked in legal offices and non-profits in Maryland, Texas, and North Carolina. He has also earned an MFA in screenwriting from Chapman Univer...

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Written by Jeffrey Johnson
Insurance Lawyer Jeffrey Johnson

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