Pay-as-you-go auto insurance is coming to Canada.
The CAA has announced the new policy will be in place later this Summer.
Drivers will only be billed for the mileage they put on their vehicles.
"When you come to us as a potential insurance customer, the way the policy works is essentially charging the consumer in every 1,000 km that they drive. Pricing is all done individually so every individual gets a premium and a rate for their experience and past history of driving," explains CAA president Matthew Tureck.
This is a first in Canada. "What we see around the world is more of a pre-determined rate-per-mile that you drive in which it just continues to add up and you get a bill at the end of the month. This is really a unique program of its sort where we pre-determine the rate, you know how much each 1,000 km is going to cost and you are pre-billed in 1,000 km increments. You really only pay for what you use."
Tureck says this structure would be ideal for seniors who don't drive very often, people who take transit to work and only drive their vehicles on weekends, snowbirds who fly to Florida for the Winter, or families with two cars but only drive one of them occasionally.