What would you do to save a few bucks a month on your insurance payment? Would you be willing to limit how much you drive the car? Some customers are so inclined, so they may only use their cars on the weekend, or just for trips. If this practice could bank you a few bucks (say 10% of your premium over six months), would you think twice? How about if the insurance company wants to attach a monitor to your car to track every move you make (no royalties were paid to The Police for the use of that line)?

In America, Progressive Insurance has started to affix a small transceiver to some of their insured cars in order to get a lower rate. In a CNN/Money interview, Tim Goodwin (who has a tracking device on his car from Progressive) noted, “There’s the ‘Big Brother’ thing, but it’s good … Since I know I’m being watched I’m on my best behavior.” In fact, Goodwin added that he is less likely to speed and is more cautious about his driving habits. This could mean that van insurance premiums become lower. Mike Barry, vice president of media relations for the Insurance Information Institute, noted that the insurance company knows “not only how many miles you drive but how and when you drive.”

Basically, you will be taking on what is known as a pay-as-you-drive policy, which is widely available in nine of the 50 United States, with more coming in the next year. Progressive notes that there are “tens of thousands” of drivers already enrolled and one in four existing customers who are eligible for the program have opted in. Progressive believes that this MyRate program may save up to 25% against a regular premium if you travel less then 10,000 miles per year, are a defensive driver, and rarely drive past midnight.

What kind of driving activity does the system monitor? Sudden starts and stops along with driving during high-risk times will up the rate by as much as 9%. If you drive once a week between midnight and 4 AM you probably shouldn’t consider this policy. Several insurers are testing these usage-based policies, including Allstate, Unigard, and The Hartford. If you are a cautious driver who is looking to save a little cash, these types of policies are an excellent option.