People are now starting to save money on car insurance simply by driving less.

Several major insurance companies are beginning to offer discounts for drivers traveling under a certain amount of miles per year. The exact number of miles varies from policy to policy, but on average drivers can save by only logging anywhere from 7,500 miles to 15,000 miles a year.

These rate reductions are relatively new and come at a time when most Americans are already driving less due to a struggling economy, and of course the steady, relentless rise of gas prices.

There is still no exact formula as to how the discounts will be calculated and each company uses their own technique in determining rate reductions. Reductions are usually made on a case by case basis, after the applicant is asked a series of questions about their driving habits.

Esurance is quoted saying, “While Esurance doesn’t specifically offer a low mileage discount, those who rarely drive do generally receive lower auto insurance rates.” Of course there are many factors that will go in to determining just how much drivers can expect to save. Esurance does goes on to state that drivers who spend less time on the road are at less of a risk of damaging their car or someone else’s car.

The low mileage, or “pay-per-mile” programs, will establish reduced premiums for those who are eligible. Most insurance companies offer drivers up to 25% reduction. Average savings are said to be about 10% to 12%. Farmers insurance company give automatic discounts for drivers who do not drive to work. Allstate is offering similar discounts to drivers who say they’ll take the bus.

In an unprecedented new development for insurance/client interconnectedness, Gmac Insurance has teamed with OnStar to begin remotely monitoring their clients driving habits. Drivers who are monitored driving less than 15,000 miles a year can receive an incredible half off on their policy. Other insurance companies can track a drivers mileage by sending out agents to collect certified odometer readings, or by uploading mileage data from the cars on-board computer system.

Certain companies such as Progressive Auto Insurance use their own mileage tracking devices, but these are usually reserved for the pay-per-mile programs, called MyRate, where drivers pay only for the amount of miles they drive. It’s also worthy to note that the implementation of these devices is causing a stir among critics who claim insurance companies are monitoring not only mileage, but also where you drive, how fast you drive, if you slam on your brakes, and what time of day you drive. Some are claiming invasion of privacy. However, Progressive does not hide these facts regarding its monitoring devices, and drivers can choose to not have one installed. Earlier this year Progressive filed suit against insurance company Liberty Mutual for infringement upon a patent regarding its own vehicle monitoring devices. A patent that Progressive claims was given to them in 2000.

For most people who are tight on funds, allowing their insurance companies to monitor their mileage is a small price to pay for reduced rates. Especially those who are already driving fewer miles each year. Not all Insurance companies are offering these discounts, but that is likely to change. Now with most of the top insurance companies embracing these policies it will only be a matter of time before it becomes universally accepted.

These policies are partially an attempt to get people to reduce their fuel consumption, partially an attempt at reducing traffic, and partially an attempt to lure more clients. Lower fuel consumption will mean lower carbon emissions resulting in less of an impact on the environment. In the midst of controversy regarding global warming’s validity, most are deciding to err on the side of caution. If you couple the ethical reasoning with the double savings of not only spending less for fuel but also spending less for auto insurance, this is a deal that some can simply not afford to pass up.