If your auto insurance company really knew how safely you drive, they might be able to shave a few bucks off your current rates. That sort of wishful thinking is now becoming a reality for more drivers than you might think.

Usage-based auto insurance plans are not new; they've been around for a decade but really hadn't gained traction due to consumer concerns about insurance companies tracking their driving patterns like 'Big Brother'... But that's changing and pay-as-you-drive insurance plans are becoming more available and more widely accepted.

Business Week reports that Progressive, for instance, now allows anyone, regardless of their insurance carrier, to test its pay-as-you-drive option, called 'Snapshot', at no cost. Participants receive a monitoring device that plugs into the dashboard and tracks how far you drive and how often or how hard you brake. The data can be viewed online and at the end of a 30-day trial period the company uses the data to calculate a quote.

For responsible drivers, that could translate into a 30 percent discount on your current rate. For motorists who then sign up for the plan, then device remains in the car for another six months and at that time your policy quote would be set again.

Progressive says 70 percent of people who try the plan receive discounts and those who don't qualify won't see their prices go up.

Clearly, some drivers are less likely to qualify for the discounts. This group would include those who travel the most miles, drive during rush hour, and brake aggressively.

It's no secret that insurance carriers traditionally evaluate risk based on criteria such as age, gender, marital status and vehicle type. Those companies that sell usage-based insurance coverage maintain that driving patterns are a more accurate tool for forecasting accidents, and as a result, cautious drivers are subsidizing dangerous drivers.

Allstate is another insurance firm that offers a 'Pay-as-you-drive' option. Their plan is called 'DriveWise'and they give policy holders a one-time incentive 10 percent discount just to try it. "If a customer says 'I'm a good driver, now they have to prove it," says DriveWise GM Nate Bryer.

The BusinessWeek report cites Brookings studies that say if all drivers adopted usage-based plans, two out of three households would save about $270 per vehicle. Additionally, the plans' incentives to reduce driving would result in an 8 percent decline in mileage. Nationwide, that could mean an annual savings of $52 billion from reduced traffic, oil consumption and pollution.

They predict that within three years 10 percent of the population will be insured by usage-based plans and that is expected to drop accident rates by 2 percent nationwide.

If the data is used correctly; not abused where the insurance providers might use the data against you-- then such plans could indeed bring lower rates for many of us. Let's see!