Pay-as-you-go insurance is gaining steam.

In the face of rising auto insurance premiums, insurance companies have been responding with potentially cheaper, pay-as-you-drive plans that, for billing purposes, track when, how, how much and where drivers use their vehicles instead of basing rates on statistics and past trends, The Detroit News reports. The practice isn't yet mainstream, but the National Association of Insurance Commissioners predicts 20 percent of insurance plans will be pay-as-you-go in five years; right now they account for less than one percent. But privacy concerns already are being raised due to the GPS tracking that's required for this type of insurance.

Let's get the good parts out of the way first. A survey by Lynx Research Consulting reportedly found that over 33 percent of drivers would consider signing up for a pay-as-you-drive plan, which analysts say can save them five to 30 percent on insurance premiums. That's pretty lucrative when one considers the average premium rose 35 percent from 2012 to 2013, according to J.D. Power & Associates. The savings are realized because pay-as-you-drive plans "can better fit a driver to their risk profile," says Ash Hassib, senior vice president and general manager of auto insurance at LexisNexis.

But there are drawbacks. While cars with General Motors' OnStar service and Ford's Sync can use those systems to transmit driving data to insurance companies, vehicles that don't have GPS-based computers standard need to have GPS-based tracking devices retrofitted to their vehicles. Not only are some people worried about insurance companies watching their every move while driving - depending on the plan, providers can penalize drivers for when and where they drive their car - but the black box-like devices are somewhat expensive at over $100 a pop. Customers also have to pay a few bucks every month to have data transmitted to their insurance providers.

It's almost inevitable that new cars all will come equipped with GPS-based tracking devices in the foreseeable future, so some of the issues with pay-as-you-drive insurance plans could go away. But all this talk just makes us love vintage cars even more...