Yes, it may be possible to receive a discount if you allow your insurance company to track your mileage. This concept is referred to as "pay as you drive" (PAYD) or usage based insurance and can cut costs for some that do not drive that far of distances.

CarInsurance.com will offer the Pay As You Drive or MyRate service in many states through Progressive and possibly other carriers. If the discount is available, you will be asked a series of qualifying questions during the purchase process.

The Los Angeles Times recently reported that insurance companies and environmentalists are backing a bill in California that would allow insurers to track motorists' mileage and pro-rate their insurance bills according to how many miles they have driven.

With PAYD the cost of auto insurance is highly dependent upon the vehicle usage, especially the miles driven. This type of auto insurance program has been used around the world. In the United States Progressive auto insurance has a program they call My Rate, which is available in only some states so far, in which a device must be placed on your car.

The device plugs into the data port of vehicles and collects vehicle usage information. The device records vehicle speed and time information, as well as when the device is connected and disconnected from the vehicle.

According to Progressive when you participate in their My Rate program, the price you pay for insurance is based on how much you drive and your driving behavior. When you choose their My Rate option they consider certain driving habits, including:

• How far you drive
• When you drive
• How aggressively you drive

With their My Rate program you can view your trip details log online. It shows many things including your recent trips, your driving habits, and how much your discount will be to name a few of the details given.

With this type of Progressive insurance program every 6 months your rates will be updated based on your driving habits. They state that you can up to 40 percent based on your driving behavior. However in some states, you may pay a surcharge that could result in a higher price for auto insurance dependent on your driving habits (no more than 9 percent). So safer drivers could receive discounts on their auto insurance, while other drivers may pay more based on their driving habits.

So some states use mileage based insurance while others are contemplating the use of pay as you drive but not all states may include mileage as a rating factor or an insurance company may or may not use the mileage put on a vehicle each day or week as part of their rating calculations. If you do not put that many miles on a vehicle or comparatively few annually then you may want to shop around for an insurance carrier that uses mileage as a rating factor, if your state allows it.

You can contact your state's insurance regulator to find out if your state permits auto insurers to use mileage as a rating factor. If this is allowed the insurance regulator may be able to tell you if any insurance carriers in your state track your mileage, as Progressive's My Rate program does, and offers discount for those that drive fewer miles.