Usage-based insurance can help lower rates. Is it right for you?

Paying for auto insurance in Canada can get expensive. For drivers looking to lower their expenses, auto insurers have been touting pay-as-you-go and usage-based insurance.

Those are the two main types of so-called telematics programs, said Matt Hands, director of insurance at Toronto-based Ratehub.ca.

Usage-based insurance is based on how you drive rather than solely how many kilometres you travel.

"It used to be a piece of technology that you'd plug into the diagnostic port of your car and it would track how you drove, such as how fast you were going, how you're braking, the corners you're taking, even the distance you're driving, just to get a sense of whether you're a quality driver or not," Hands said.