GM, OnStar Announce Low-Mileage Insurance Deal

A press release from General Motors and OnStar today announced an insurance discount program for low-mileage drivers.

The program uses OnStar technology to track drivers' mileage. If the users drive under 15,000 miles annually, they can save up to 54% on their premiums. As of now, roughly 10,000 drivers have enrolled in the program.

When a driver subscribes to the program, they are given an automatic 11% discount. The monthly mileage is then taken (with the user's permission) from their odometer and emailed to GMAC Insurance. The company takes that value and deducts an amount based on the distance driven. The press release goes on to say that there is no penalty for driving over 15,000 miles, and the driver is still given the OnStar subscriber discount.

Gary Kusumi, President and CEO of GMAC Insurance says, "Customers who drive less should pay less, and this program allows customers to use technology already in their vehicles to give them the discounts they deserve. Giving consumers the power of cost control is a welcome advance, especially as people manage their transportation costs more closely in the midst of fluctuating gas prices. The program also encourages people to limit unnecessary driving, helping the environment in the process."

Chet Huber, President of OnStar went on to say, "We are bringing more value to the 2.8 million subscribers who receive monthly OnStar Vehicle Diagnostics emails. Not only are we providing them with information about the health of key operating systems in their vehicles, we are helping them to save on their transportation costs as well."

The press release points out that the OnStar Vehicle Diagnostics program is only available in GM vehicles. It does not mention if there are plans to introduce it to other manufacturers. The company insists that no additional data is collected besides that needed to read mileage.

Also, the service is currently available in only 34 states, but the companies have plans to expand that number next year.

The highest amount that can be saved is 54%, if the driver drives between 0 and 500 miles. The lowest amount is 13%, which occurs if the driver drives between 12,501 and 15,000 miles.

OnStar, a subsidiary of General Motors, has been the subject of some controversy. Although the website's privacy statement addresses various concerns, saying that it does not continuously track vehicles or collect personal information, some are skeptical. An example of this is an OnStar privacy website which says, "OnStar is also one of the best tools available that the government and big business could use to invade your privacy."

Sources:

http://www.prnewswire.com/cgi-bin/stories.pl?ACCT=104&STORY=/www/story/07-17-2007/0004626618&EDATE=

http://www.onstar.com/us_english/jsp/privacy_policy.jsp

http://www.onstarprivacy.com/