Pay as you go isn't just for cell phones anymore, it turns out some auto insurance companies are switching to pay as you go plans in order to offer better rates to customers. Traditionally insurance rates are based on, among many things, the estimated miles that each driver will travel during a year. Many people argue that these estimates are inaccurate and that a pay as you go plan would provide consumers with an incentive to drive less. Legislation is currently underway in California to let insurance companies base rates on actual miles traveled it is estimated that it would be the equivalent of removing 10 million cars from the road!

While California is only on the cusp of letting insurance providers make use of this information to determine what your premium will be at least one other company is already offering pay as you go insurance rates in several states. Progressive offers a My Rate program in four states and requires that users hook up a device to their car which tracks the miles traveled as well as how you drive to recalculate your rate every 6 months.

Both of these plans have some similarities, neither will track where you go with GPS and both of them are under fire by privacy groups. The programs differ in that the My Rate plan from Progressive tracks WHEN and HOW you drive in order to determine your insurance rate. In California, much to the chagrin of insurers, neither of these pieces of information can be tracked.

You might think that by now, every angle of the gas price hike has been explored, but there are a couple of new nuggets out today. One, from Paul Kedrosky's "Infectious Greed," is a hard look at just how much driving has changed. He has numbers from the Union-Tribune on driving patterns in the San Diego area. It's just one small snapshot of the country, but it is probably being repeated in the same proportions everywhere.

Highway travel on major roads in that area is down across the board, with some down as far as 15 and 17%. The only region named that didn't have any major decrease was Los Angeles County during weekdays, which was unchanged.

The other group being hit by the gas price crisis? The Amish. Go figure. The headline, of course, is meant to stop people short, because we all know that the Amish don't drive in cars. But USA Today says that Amish craftsmen and farmers who use diesel fuel are feeling pinched. There's actually no restriction on using engines -- just not electricity -- explains an Amish expert.

I grew up in Amish country -- the heart of it in Lancaster, PA -- so this comes as no surprise to me. But what I'm waiting to see is how the Amish, who are masters of ingenuity, get around the fuel crisis. With all the corn that they grow, shouldn't we be seeing some innovations in ethanol?

It's possible that I'm becoming a cold-hearted miser but many of the stories about the havoc wreaked by rising gas prices and a recessionary environment strike me as, well, kind of funny in that they expose the culture of entitlement that has taken hold of our country.

The New York Times reports that $4 gas has made this "the summer the cruising died" for many teenagers. Some of the lines in this article are actually hilarious: "Police officers who keep watch on weekend cruising zones say fewer youths are spending their time driving around in circles, with more of them hanging out in parking lots, malls or movie theaters."

Oh the humanity! Teens have to spend their summers at malls and movie theaters instead of driving in circles? We need a law against that -- a bailout! A subsidy! A driving around in circles stimulus package!

The good news is that high gas prices combined with more restrictive laws governing teen driving mean that fewer high school students have cars at all -- which is good because that money would generally be much better used for college or, gasp, saving for the future.

Take the $6 thousand you were going to spend on a teen's car and put it in a savings account paying 3.5%, and it could be a down payment on a house in not too many years. Then add in the savings from less money spent on gas and convenience store sodas, and you realize that not buying your kid a car could be the best investment of her life.

An unemployed 30-year old German man lit his 1995 BMW on fire to protest high gas prices.

Amazingly, the display did not immediately cause OPEC to increase production and lower prices, so I guess we have to call this effort a failure. I'll sympathize somewhat because gas costs over $9 a gallon in Germany right now, but this is still one of the dumbest things I've ever heard of -- although it did secure the man, whose name has not been made public, his 15 minutes of fame.

Making matters even worse, the Associated Press reports that he doused the car in gasoline first. So apparently the untold story of high gas prices is that not only is driving getting more expensive, but lighting your car on fire because you can't afford gasoline is a considerable hardship for many people.

A better solution: don't light your car on fire, sell it -- trade down to a used sub-compact, or take public transportation and walk - if you're like most people, you could use the exercise.

With gas prices rising steadily over the past decade -- even before the recent levitation -- there's been a question nagging at economists: at one point would consumers break? When would the elasticity of demand start to show? Obviously Americans would drive a lot less if gas were $35 per gallon, but at would point would consumption start to slow.

2008 appears to be the year, and $4 appears to be the beginning of the breaking point. Cambridge Energy Research Associates reports that "U.S. gasoline demand will likely decline in 2008 for the first time in more than 17 years. For the first time since the 1970s and early 1980s the number of miles driven by Americans has clearly begun trending downward."

In April, Americans drove 1.8% fewer on public roads compared to the same period last year, the sixth consecutive month of declines.

This may seem obvious, but apparently it isn't: waiting to get more gas for your car until the very last minute is not a good way to save money. It's a stupid way to not save money and maybe waste a ton of money and get stranded somewhere.

The Associated Press reports that "As the national average retail price of gasoline flirts with $4 per gallon, highway assistance programs and area chapters of AAA have noted a rise in drivers running out of gas -- twice as often as last year, in some cases."

People are so reluctant to pay high gas prices that they wait til the last minute but guess what: You still have to buy gas anyway and, with the way prices have been moving lately, the longer you wait the more you pay. Of course, running out of gas can be not only dangerous but it can also make you late for commitments and getting towed or getting service can cost a lot of money. Worse, running close to empty can wear down the fuel pump, requiring expensive repairs. So don't be stupid: fill up your car before you run out of gas. Waiting is false economy.

The quest for signs of intelligent life among American consumers continues ...

I'm not sure why this is considered news. Any adult with common sense knows that when you make claims on your auto insurance policy, your rates are likely to increase. There's very simple logic behind it: Those who have more accidents and cost the insurance companies more should have to pay their fare share through higher rates.

Insurance companies have been gathering data for a zillion years. Every bit of information is tracked and they use it to determine who's a greater risk to them. If the chances are higher that you will cost the insurance company money, then you're going to pay a higher premium.

But here's a little known tidbit mentioned in the video below: Your auto insurance rates might go up even I you don't file a claim for an accident. If you contact your insurance company about an accident you've had, but decide not to file a claim, they might still record the information about the accident in their database. And when it comes time to renew your policy, that accident may affect your premiums.


Tracy L. Coenen, CPA, MBA, CFE performs fraud examinations and financial investigations for her company Sequence Inc. Forensic Accounting, and is the author of Essentials of Corporate Fraud.

If you ever saw the show Repo Man: Stealing for a Living, you know that taking back a car from a deadbeat buyer can be a challenging -- and expensive -- ordeal.

Now finance companies who work with subprime car buyers are fighting back. The Sekurus Company offers lenders a "payment protection system." If you're behind on your payment, a small device installed in the car beeps. Make the payment and you enter a pin # and it stops beeping. If you don't pay, Sekurus' device will turn off the car's engine!

If soaring gas prices are hitting your wallet, the most obvious way to cut back on the expense is to reduce the amount of driving you do and the size of the car that you drive.

But one overlooked technique is to slow down. According to CNNMoney, "In a typical family sedan, every 10 miles per hour you drive over 60 is like the price of gasoline going up about 54 cents a gallon. That figure will be even higher for less fuel-efficient vehicles that go fewer miles on a gallon to start with."

If you care about the physics of this, read the article. This seems like a pretty good win-win: drive safer and save money. In addition, keeping your speed down will reduce your chances of getting traffic violations which drive up car insurance premiums.

In other driving news, if you're looking to slow down your speed demon teenage son (or daughter, but most likely son...), you might want to look into the Drivecam. A recent Wall Street Journal piece spotlighted how this device can monitor your teen's driving, sending you a weekly report of how safe junior is.

If you're paying for his gas, which I hope you aren't, tell him to slow down and stop wasting your money.

The combination of cell phones and driving is a hot button issue these days, and well it should be. My research indicates that cell phone- related crash statistics are sketchy at best but it seems that almost everyone agrees talking on a cell phone while driving can quickly lead to tragedy. I have a cell phone and it remains turned completely off and in its case when I'm driving. Other people have different opinions on the subject and I'm not here to chastise them for their choices.

What got my gander up today, and caused me to call my local police dispatcher was that I witnessed one of Park Falls, Wisconsin's finest, talking on her cell phone while on duty, driving, and one handedly navigating a dangerous curve.

A CNN/Opinion Research Corp. poll found that soaring gas prices have caused 64% of Americans to cut back on their driving. 19% said that they had reduced their driving enough to have a significant impact on their lives.

On Sunday, the median price of gas rose to a record $3.285, and hasn't pulled back much since. Over the past year, gas prices have risen more than 28%.

Amusingly, many respondents said that if gas hit $8 a gallon, they would quit driving altogether. This is good news. Until recently, demand for gas has been remarkably inelastic. In spite of guffawing and whining, people kept driving and shelling out the cash. But a willingness on the part of consumers to seek alternatives means of transportation could help ease the burden of rising gas prices.

And driving less has other benefits too: it's better for the environment, walking/biking does wonders for your body, and less driving will also mean less eating out/shopping for stupid stuff we don't need. Of course, that's bad for retailers and restaurants, but it could be great for your retirement portfolio.

I didn't get my driver's license until I was 18, for 2 reasons: first, I was afraid of driving and secondly, as geeky as this sounds, I preferred to save my money and invest it, not blow it on a car, sky-high insurance premiums, and increasingly expensive gas. And then there are the other expenses that come with having a car: increased meals out, $1.29 a bottle water at convenience stores and, of course, repairs.

All in all, I would estimate that I saved more than $10 thousand by waiting an extra 2 years to get a car and start driving. And I hate to be that guy but, if you can save $10 thousand by the time you're 18 and invest it at 10% for the next 50 years, you'll accumulate more than $1.1 million. If more people, or perhaps just some people, had done that a generation ago, perhaps we wouldn't have to endure endless concern about baby boomers facing a declining standard of living in retirement.

So I'm furious about the continually creep upward of gas prices, and it hits me. There are web sites out there that will tell you how to find cheap gas.

I've known about this for a couple years, but do I think to take a look at any of them before I go driving? No. So telling everyone about this is as much for me as it is for you. Maybe if I take the time to go through the list of some of the sites that are out there, it'll be in my mind, and I'll start actually using them.

The best that I've seen is GasBuddy.com, though for all I know, it's only the fourth best, or the 14th. Still, it seems really comprehensive, and when I checked to see what gas stations I could find in Cincinnati with the cheapest fuel, there were quite a few options, and they had all been updated within hours of my looking. When I went to Automotive.com's gas price web site, the information for my town was pretty comprehensive--but two days' old. I also got a kick out of the fact that GasBuddy shows where the highest gas prices are, in case I want to stay away from stopping for gas in a certain area, or if I develop a sudden urge to give the oil companies more of my money. Stranger things have happened to me. Once several years ago, when gas prices first shot up and things felt futile, I almost mailed my credit cards and wallet to Shell Oil, figuring that I might as well cut out the middleman.