gmac, the insurance and finance corporation paired with General Motors, is expanding a scheme the company's been working with since 2004. Drivers of OnStar equipped vehicles can agree to have the satellite guided tracking service continually record their car's mileage and send the data to GMAC's insurance unit. GMAC will then determine if the miles are low enough to warrant a cut in insurance premiums.

"You drive less, you pay less, it's very simple," OnStar President Chet Huber said.

Privacy advocates have a lot to worry about here. Innocuous as the GMAC plan might sound it could give rise to issues down the road.

Giving insurance entities realtime insight into where and how much you drive could lead to a day when driving in certain regions - inner cities streets or remote backroads - could prove costly to the driver.

Picture a scene where a driver makes a shortcut through an urban slum that has high vehicle accident and theft rates. Afterwards (or perhaps while he's still driving through) he's issued a rate-increase warning from his insurance provider because his travels took him to areas he normally doesn't travel and that are classified as high risk zones.

Eventually, we'd be forced to base our decisions on where and when to drive on saving money on our insurance premiums.

[Source: Detroit News]