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GPS tracking devices might soon be lowering your car insurance premiums. A unique new program gives a “pay-as-you-drive” spin on insurance. This new program involves a GPS tracking device being installed on the vehicle. The tracking device enables the insurance company to monitor the vehicle’s every move, giving them a pretty clear picture of the individual’s driving habits. This information can then be used by the insurance provider to determine a fair insurance premium.
Good or Bad?

Many people are uncomfortable with their insurance company have such detailed information about their driving habits and travels, viewing it as an invasion of privacy.
But New Jersey software programmer Saman Javasekara embraced this new program. After installing the GPS tracking device on his vehicle, he received a 23% discount from Progressive. Like Javasekara, many people who put aside their concerns will find themselves very pleased with the discount that they receive.
How It Works
This tracking program gathers pieces of information that are particularly important to insurance companies, such as how often the vehicle is driven, the distance the vehicle is driven, and how often the driver stops suddenly. Drivers who know that their moves are being monitored will keep focused on their driving. This new tracking program encourages less frequent driving in addition to safer driving. If programs like this become popular, people will be more likely to carpool and to walk or ride a bike to close locations, which would cut down on congestion and pollution.
This tracking system uses the car’s computerized diagnostic port, so it cannot be used in cars that were made before 1996.
Although the technology is still relatively new, using a GPS tracking device in a vehicle is not a completely new concept. State Farm uses GPS tracking devices in the vehicles that they insure, but they only use the trackers for roadside assistance. They do not use the devices in any way to calculate insurance rates.

Article Written by Janice Grover