Comprehensive Guide to Pay-Per-Mile Car Insurance (2024)
Pay-per-mile insurance can give low-mileage drivers serious discounts, but not all insurance companies offer this type of coverage.
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Written byMelanie Lockert
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10+ years writing on personal finance topics
Host of the Mental Health and Wealth podcast
Melanie is a blogger, author, and speaker specializing in personal finance and debt management. She’s also the author of the blog and book “Dear Debt.”
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Edited byEvelyn Pimplaskar
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10+ years in insurance and personal finance content
30+ years in media, PR, and content creation
Evelyn leads Insurify’s content team. She’s passionate about creating empowering content to help people transform their financial lives and make sound insurance-buying decisions.
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Data reviewed byKonstantin Halachev
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7+ years experience in data analysis
Ph.D. in Computational Biology
Konstantin has led data teams across multiple industries, including insurance, travel, and biology. He’s led Insurify’s engineering team for more than three years.
Updated November 20, 2024
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Table of contents
Pay-per-mile car insurance is an innovative type of car insurance that rewards policyholders who drive less with potentially lower rates. As the name indicates, insurance providers typically charge you by the mile on top of a base rate for pay-per-mile insurance.
This type of coverage presents a cost-effective option for remote workers, retirees, self-employed people, and infrequent drivers. You can purchase this coverage through Mile Auto, Metromile, Nationwide’s SmartMiles program, and more.
Quick Facts
Most pay-per-mile car insurance programs charge a monthly base rate and a low per-mile cost.
You may see insurers refer to pay-per-mile with many different terms, including pay-as-you-go, pay-as-you-drive, and pay-how-you-drive.
If you drive less than the national average of 13,473 miles per year, pay-per-mile car insurance could save you money.
How does pay-per-mile insurance work?
Pay-per-mile insurance is directly tied to the number of miles you drive each month. Through telematics technology, auto insurers can track your mileage and driving behavior to offer up-to-date and accurate rates.[1]
When you sign up for pay-per-mile insurance, your insurance company will generally ask you to use a telematics device to track your miles and driving data. Insurers will typically send a device for you to put in your vehicle — potentially in the on-board diagnostics port — that also communicates with a mobile app. If you don’t want to share driving data through a device, some companies, like Mile Auto, send text and email reminders to prompt drivers to submit odometer readings.
The premium your insurer charges you will vary. Combined with your per-mile fee based on your driving habits, a monthly base rate derived from various risk factors, such as location and age, forms the foundation of your rate.
Pay-per-mile insurance companies typically have a daily mileage cap, or a limit on the number of miles you pay for, which is helpful for road trips or an emergency that requires long-distance driving. For example, both Metromile and Nationwide’s SmartMiles offer pay-per-mile programs with a mileage cap of 250 miles per day.
Premium variability represents the main difference between traditional and pay-per-mile car insurance. Purchasing traditional auto insurance may allow you to better plan for how much you’ll pay for coverage each month and year. Rates for pay-per-mile coverage fluctuate based on driving activity, in contrast, but will ideally cost less for low-mileage drivers than traditional insurance. You can still choose from typical coverage options, including:
Liability insurance
Nearly every state requires drivers to carry liability insurance, which pays for damage to the other vehicle and injuries to the other driver and passengers in an accident you’re at fault for.
Collision insurance
Collision insurance is an optional coverage that’s part of full-coverage car insurance. It can pay to repair your car if it’s damaged in an accident. If you lease or finance your car, your leasing company or lender will likely require you to buy full-coverage insurance.
Comprehensive insurance
If your car is stolen or suffers damage caused by something other than an accident, comprehensive coverage can pay to repair or replace your vehicle. Comprehensive is also part of full coverage, so you may have to buy it if you lease or finance your car.
It’s important to know that even though pay-per-mile car insurance has been around for more than a decade, not all insurers offer this type of coverage.
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Compare Car Insurance by Coverage
Will pay-per-mile insurance save you money?
Whether you’ll save money with pay-per-mile insurance depends on the miles you drive on average, so you should take an inventory of your driving habits to understand how much you actually drive.
People in the U.S. drive 13,476 miles on average per year, which divides out to an average of 1,123 miles per month, according to 2022 data from the U.S. Department of Transportation Federal Highway Administration.[2] You may be a good candidate for pay-per-mile insurance if you drive far less than this national average. Metromile and Mile Auto pay-per-mile insurance, for example, both cater to drivers with 10,000 miles per year or fewer.
To understand what you might pay with pay-per-mile insurance, you can see if the company offers a set formula. Generally, insurers add the base rate to the miles driven per month, multiplied by the per-mile rate.
Best pay-per-mile insurance companies
Not all car insurance companies offer pay-per-mile insurance. Comparing multiple insurance companies will help ensure you’re securing the best rate and coverage possible. Learn more about the best pay-per-mile insurance companies below.
Mile Auto
| User Reviews | 4.2 |
|---|---|
| IQ Score The Insurify Quality (IQ) Score uses more than 15 criteria to objectively rate insurance companies on a one-to-ten scale. The Insurify editorial team researches insurer data to determine the final scores. | 7.5 /10 |
| Liability Only Liability-only insurance, sometimes called minimum-coverage insurance, pays for bodily injury and property damage to others in an accident the policyholder causes. It does not pay for the insured’s own damages. | $56/mo |
| Full Coverage Full-coverage car insurance generally includes liability, collision, and comprehensive coverage, and may include other optional coverages such as uninsured motorist coverage. Collision covers a policyholder’s repair or replacement costs in case of an accident. Comprehensive covers damages caused by non-accident events. The average quote displayed here reflects policies with the following coverage limits: $50,000 bodily injury liability per person; $100,000 bodily injury liability per accident; $50,00 property damage liability per accident; $1,000 collision deductible; and a $1,000 comprehensive deductible. | $95/mo |
4.2
Best choiceBased on 53 verified guest reviews and ratings
Reviews (29)
Cookie
October 15, 2024
Verified Purchase
Excellent
Low mileage rate.
Tasha
October 10, 2024
Verified Purchase
Not pleased
Don't opt for this insurance if you're on a budget. I was unaware that this was a cost-per-mile insurance. I was never informed about it, and now I'm paying an extra $20 for roadside assistance that I thought was included. I had mentioned to the representative that I couldn't afford expensive insurance, yet the cost has increased.
Thomas
October 8, 2024
Verified Purchase
Mixed Review
Mixed. One representative was confusing and couldn't guide me regarding a text I received which stated my payment, which I had been informed had been processed, had actually gone through. To ensure I was covered, I made the payment. The previous representative had been professional and direct. So, I have a mixed reaction.
JD Power
J.D. Power data measures overall customer satisfaction and claims satisfaction based on a 1,000-point scale.
NRNAIC Index
Average amount of customer complaints relative to competitors on a 0-5 scale. A lower score represents fewer complaints.
NRA.M. Best
A.M. Best analyzes an insurer’s financials, operating performance, business profile, and other factors to generate an opinion-based rating of a company’s financial and credit strength. Ratings range from A++ (exceptional) to D (poor).
NRWhy we picked this company
One of the leading low-cost providers for pay-per-mile insurance, Mile Auto focuses exclusively on this coverage type. The company claims that drivers can save up to 30% or 40% on car insurance when compared to current rates for traditional insurance.
An example of rates offered on the Mile Auto website includes a monthly rate with a potential base rate of $48 and a per-mile rate of 8 cents. A driver with this base and per-mile rate who drove 300 miles in a month would pay a $72 premium for that month. Mile Auto is currently only available in the following states: Arizona, California, Georgia, Illinois, Ohio, Oregon, Pennsylvania, Tennessee, and Texas.
Pros
Coverage options comparable to those offered by traditional insurers
No telematics device needed — track monthly miles with a photo of your odometer
Cons
Only available in nine states
Only 2.7 (out of 5) stars on Trustpilot and many complaints about poor claims experience
Metromile
| User Reviews | 3.9 |
|---|---|
| IQ Score The Insurify Quality (IQ) Score uses more than 15 criteria to objectively rate insurance companies on a one-to-ten scale. The Insurify editorial team researches insurer data to determine the final scores. | 7.0 /10 |
| Liability Only Liability-only insurance, sometimes called minimum-coverage insurance, pays for bodily injury and property damage to others in an accident the policyholder causes. It does not pay for the insured’s own damages. | $63/mo |
| Full Coverage Full-coverage car insurance generally includes liability, collision, and comprehensive coverage, and may include other optional coverages such as uninsured motorist coverage. Collision covers a policyholder’s repair or replacement costs in case of an accident. Comprehensive covers damages caused by non-accident events. The average quote displayed here reflects policies with the following coverage limits: $50,000 bodily injury liability per person; $100,000 bodily injury liability per accident; $50,00 property damage liability per accident; $1,000 collision deductible; and a $1,000 comprehensive deductible. | $113/mo |
3.9
A solid optionBased on 80 verified guest reviews and ratings
How drivers feel about Metromile
Drivers appreciate the helpful customer service, initial low rates, and flexible payment options but dislike the frequent premium increases and poor communication.
AI-generated from the text of verified reviews collected by Insurify
Best For
Low-mileage drivers
Pay-as-you go car insurance
Robust mobile app
How drivers feel about Metromile
Drivers appreciate the helpful customer service, initial low rates, and flexible payment options but dislike the frequent premium increases and poor communication.
AI-generated from the text of verified reviews collected by Insurify
Best For
Low-mileage drivers
Pay-as-you go car insurance
Robust mobile app
Reviews (50)
Michael
November 3, 2024
Verified Review
Enjoyed the ride until the rate went sky-high
My payment went up by 50%.
Patrick
October 17, 2024
Verified Review
Stay Away
I used their services for 6 months, and then they raised my policy by 300% for no apparent reason. I believe they operate on a bait and switch type of scam, offering a great price in the beginning and then, bam!
Stephen
October 6, 2024
Verified Review
Great Insurance
Great, just difficult to communicate with someone.
JD Power
J.D. Power data measures overall customer satisfaction and claims satisfaction based on a 1,000-point scale.
NRNAIC Index
Average amount of customer complaints relative to competitors on a 0-5 scale. A lower score represents fewer complaints.
3.25A.M. Best
A.M. Best analyzes an insurer’s financials, operating performance, business profile, and other factors to generate an opinion-based rating of a company’s financial and credit strength. Ratings range from A++ (exceptional) to D (poor).
NRWhy we picked this company
Another leading contender in the pay-per-mile insurance space, Metromile claims drivers can save up to $947 per year with its coverage. The rate example on Metromile’s website includes a $29 monthly base rate and a per-mile rate of 6 cents. If you drive 450 miles in a month, you’d pay $56 that month for coverage.
Metromile has a daily mileage cap of 250 miles in most states, but New Jersey drivers have a cap of 150 miles per day. You’ll pay per-mile up to that amount and then your miles are free. Metromile currently offers coverage in Arizona, California, Illinois, New Jersey, Oregon, Pennsylvania, Virginia, and Washington.
Pros
Low-mileage drivers could see significant savings
Most full-coverage policies include free pet injury protection for covered claims
Cons
Only available in eight states
Numerous complaints on the National Association of Insurance Commissioners Consumer Complaint Index
Nationwide SmartMiles program
Nationwide offers traditional car insurance as well as pay-per-mile insurance coverage through the company’s SmartMiles program. An example on the website explains you could qualify for a $60 base rate and a per-mile rate of 7 cents. If you drive 500 miles in a month, you’d pay $95.
Under this program, policyholders have a daily mileage cap after 250 miles. The SmartMiles program isn’t available in Alaska, Hawaii, Louisiana, North Carolina, or New York.
Allstate Milewise program
Allstate offers both traditional car insurance and the Milewise pay-per-mile insurance program. The program’s rate breakdown differs from other pay-per-mile programs because it uses mileage and a daily base rate instead of a monthly base rate.
The company states you could have a daily rate of $1.50 and a per-mile rate of 6 cents. Your daily rate would come out to $2.22 if you drove 12 miles a day. Your monthly rate would be around $66 if you drove close to 12 miles each day. The program provides a mileage cap of 250 miles in most states, but drivers in Oregon, Illinois, Indiana, Ohio, and New Jersey have a mileage cap of 150 miles.
The Allstate Milewise program is currently available in Arizona, Delaware, Florida, Idaho, Illinois, Indiana, Maryland, Massachusetts, Minnesota, Missouri, New Jersey, Ohio, Oklahoma, Oregon, Pennsylvania, South Carolina, Texas, Virginia, West Virginia, Washington, and Wisconsin.
Noblr by USAA
USAA is a financial services company that works with military members. The company offers many financial products, including traditional car insurance and pay-as-you-drive insurance, through a USAA company called Noblr. The company calculates rates based on how much you drive, with a premium made up of a fixed rate and a variable rate.
Noblr is currently available in Arizona, Colorado, Illinois, Louisiana, Maryland, New Mexico, Ohio, Pennsylvania, Texas, and Virginia.
Pay-per-mile alternative: Hugo
| User Reviews | 4.1 |
|---|---|
| IQ Score The Insurify Quality (IQ) Score uses more than 15 criteria to objectively rate insurance companies on a one-to-ten scale. The Insurify editorial team researches insurer data to determine the final scores. | 7.0 /10 |
| Liability Only Liability-only insurance, sometimes called minimum-coverage insurance, pays for bodily injury and property damage to others in an accident the policyholder causes. It does not pay for the insured’s own damages. | $227/mo |
4.1
Best choiceBased on 121 verified guest reviews and ratings
How drivers feel about Hugo
Drivers appreciate the excellent prices, flexible payment options, and helpful customer service but dislike the lack of full coverage and difficulty reaching support.
AI-generated from the text of verified reviews collected by Insurify
Best For
Micropayments
No down payments
Fast coverage
How drivers feel about Hugo
Drivers appreciate the excellent prices, flexible payment options, and helpful customer service but dislike the lack of full coverage and difficulty reaching support.
AI-generated from the text of verified reviews collected by Insurify
Best For
Micropayments
No down payments
Fast coverage
Reviews (45)
Javier
November 12, 2024
Verified Purchase
Hugo Insurance is the Best
Hugo was wonderful. We paid for car insurance at a good, low price. It was exactly what we needed to look into. Due to our income, paying for two vehicles for less than $100 is an awesome price. Thank you, Hugo. I recommend others to try it out.
Gabrielle
November 2, 2024
Verified Review
Good
The price is amazing.
Dawn
October 21, 2024
Verified Review
Paying Too Much
It's pretty expensive and they don't really provide much coverage.
JD Power
J.D. Power data measures overall customer satisfaction and claims satisfaction based on a 1,000-point scale.
NRNAIC Index
Average amount of customer complaints relative to competitors on a 0-5 scale. A lower score represents fewer complaints.
NRA.M. Best
A.M. Best analyzes an insurer’s financials, operating performance, business profile, and other factors to generate an opinion-based rating of a company’s financial and credit strength. Ratings range from A++ (exceptional) to D (poor).
NRWhy we picked this company
Hugo launched in 2021 and is currently the only insurance company offering on-demand car insurance. Drivers can open a Hugo account without paying a down payment up front. Drivers can choose a policy term of three, seven, 14, or 30 days, or six months, and policyholders can pay smaller amounts more frequently instead of all at once. Drivers also receive instant proof of insurance. Hugo currently only offers state-minimum liability coverage in 13 states. J.D. Power and AM Best have not yet evaluated Hugo’s customer satisfaction or financial strength.
Pros
Short-term policies
No up-front down payment required
Flexible, pay-as-you-go insurance
Cons
Only available in 13 states
Doesn’t offer collision or comprehensive coverage
No discounts available
Which drivers might benefit from pay-per-mile insurance?
The primary benefit of pay-per-mile insurance is the potential for paying less for car insurance. The fewer miles you drive, the less you have to pay for car insurance coverage. People who drive a lot for work and other regular commutes don’t benefit from this insurance model.
Pay-per-mile insurance can make a lot of financial sense for certain groups of people, including:
Remote workers
Retirees
Students who live near campus
Low-mileage drivers
Pay-per-mile insurance FAQs
Before making the switch to pay-per-mile insurance, compare your options and find answers to common questions about this type of coverage below.
Is there a difference between telematics and pay-per-mile car insurance?
Auto insurers use telematics devices to help track your mileage and driving behavior, which qualifies as usage-based insurance. Telematics car insurance may be used to offer you discounts for safe driving, but pay-per-mile insurance regularly tracks your miles to assess rates. What gets tracked and how your miles or behavior determines your rates vary by insurer.
Is pay-per-mile insurance worth it?
Pay-per-mile car insurance can be a money-saving option for people who drive very little — such as remote workers, public transportation commuters, seniors, and teens. A low monthly base rate and per-mile charge could cost less than standard car insurance for low-mileage drivers.
What does Metromile charge per mile?
Metromile doesn’t specify its exact per-mile charge on its website, so you’ll have to request a quote to get exact information. But the company does provide an example on its website of a $29 base monthly rate plus a 6-cent per-mile charge.
Is Milewise a good idea?
Allstate offers a pay-per-mile insurance option called Milewise. This option works well for low-mileage drivers, such as employees who work from home, retirees, and people who take public transportation frequently. If you live in one of the 21 states with Milewise available, you can get a low daily rate and save money on insurance if you drive infrequently.
How do insurance companies track your mileage?
Insurance companies that offer pay-per-mile insurance typically require you to install a telematics device in your car that pairs with a mobile app. This sends mileage data to the company to help determine rates. Some other companies, like Mile Auto, may allow you to regularly take photos of the odometer instead of installing a device.
Methodology
Insurify data scientists analyzed more than 90 million quotes served to car insurance applicants in Insurify’s proprietary database to calculate the premium averages displayed on this page. These premiums are real quotes that come directly from Insurify’s 50+ partner insurance companies in all 50 states and Washington, D.C. Quote averages represent the median price for a quote across the given coverage level, driver subset, and geographic area.
Unless otherwise specified, quoted rates reflect the average cost for drivers between 20 and 70 years old with a clean driving record and average or better credit (a credit score of 600 or higher).
Liability-only premium averages correspond to policies with the following coverage limits:
- Bodily injury limits between state-minimum rates and $50,000 per person, $100,000 per accident
- Property damage limits between $10,000 and $50,000
- No additional coverage
- Comprehensive coverage with a $1,000 deductible
- Collision coverage with a $1,000 deductible
Quotes for Allstate, Farmers, GEICO, State Farm, and USAA are estimates based on Quadrant Information Services’ database of auto insurance rates.
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- The 10 Best and Worst Car Insurance Comparison Sites
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- How to Get Cheaper Car Insurance With a Low Income
- Best Cheap Full-Coverage Car Insurance
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Sources
- National Association of Insurance Commissioners. "Telematics/Usage-Based Insurance."
- U.S. Department of Transportation Federal Highway Administration. "Average Annual Miles per Driver by Age Group."
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Melanie Lockert
Melanie Lockert is the founder of the blog and author of the book, "Dear Debt." Through her blog, she chronicled her journey out of $81,000 in student loan debt. Her work has appeared on Allure, Business Insider, Credit Karma, Fortune, and more. She is also the co-founder of the Lola Retreat and host of the Mental Health and Wealth show podcast. She lives in Los Angeles and enjoys jazz music, traveling, coffee, and spending time with her two cats and partner.
10+ years in insurance and personal finance content
30+ years in media, PR, and content creation
Evelyn leads Insurify’s content team. She’s passionate about creating empowering content to help people transform their financial lives and make sound insurance-buying decisions.
Featured in
7+ years experience in data analysis
Ph.D. in Computational Biology
Konstantin has led data teams across multiple industries, including insurance, travel, and biology. He’s led Insurify’s engineering team for more than three years.
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