Low-mileage drivers with safe driving habits could save with pay-per-mile car insurance.

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Pay-per-mile car insurance lets you pay rates based on how much you drive. Drivers who are on the road less often are less likely to get into an accident. You'll pay less for car insurance because you're less risky to insure. Some drivers may see cheaper rates with a pay-per-mile policy, but it pays to get quotes from multiple companies.

How does pay-per-mile car insurance work?

Pay-per-mile car insurance programs charge customers a base rate plus a per-mile fee, usually up to a maximum amount per month.

  • You'll pay a base rate based on standard insurance risk factors like your age, vehicle and driving record. The base rate is usually $30 a month or higher.
  • If you don't drive at all for one month, you only pay the base rate for that month.
  • If you take a long road trip, you might max out your payment because you aren't charged for miles in excess of 250 in a single day.
  • The per-mile rate is typically a few cents. If you drive, for example, 200 miles per month at a rate of 4 cents per mile, you would be charged $8, plus the base rate.

Insurance companies will typically use a small device installed in your car to count your miles. Pay-per-mile plans are ideal for drivers looking for affordable car insurance who don't drive frequently.

Companies that offer pay-per-mile car insurance

Currently, only a few insurers offer a pay-per-mile car insurance policy, though many offer discounts for lower mileage. Here is a list of the insurance companies offering pay-per-mile car insurance and where their policies are available.

MetromileAZ, CA, IL, NJ, OR, PA, VA, WA

Allstate MiIewise
Nationwide SmartMilesAZ, CO, CT, DC, IA, ID, IL, IN, MD, ME, NH, NM, NV, OH, OR, PA, TX, UT, VA, VT, WA, WY
Mile AutoAZ, CA, GA, IL, NJ, OR, PA, VA, WA

These four insurers offer true pay-per-mile services in a sense that customers are charged explicitly based on a base rate and per-mile fee. While availability is currently limited to select states, many carriers plan to expand offerings to other regions in the near future.

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How pay-per-mile differs from telematics insurance and other rate plans

Today, many insurers rely on new technologies like in-car sensors to analyze driving behavior and determine rates, including for pay-per-mile policies. The use of such connected devices in insurance is often referred to as telematics.

While some carriers do not charge customers a per-mile fee, they will offer a telematics discount based on mileage or safe driving behavior. Some insurers, like Root, have developed new policy offerings that are priced based on a variety of driving metrics, in addition to mileage.

These programs can be a bit less obvious in terms of understanding exactly how fewer miles translates to a smaller rate. In this case, carriers will still price premiums based on a risk pool, the traditional way of pricing car insurance.

You get a discount after they analyze the data from your device, and deem you a safe or infrequent driver. Some of the programs make you return their device after a certain time, and your discount will be reflected on your next policy renewal.

Drivers who should switch to a pay-per-mile car insurance

Those who will benefit the most from pay-to-drive or pay-per-mile are those who drive less than the national average of 12,000 miles per year, or 1,000 miles. Even at a few cents per mile, anything above 12,000 miles plus the base rate will make the service particularly expensive.

If you use your car minimally, going with a pay per mile service can save you a lot of money. However, if you underestimate your driving habits, you may actually end up paying more.

Below we offer an example of how a pay-per-mile service can save you money relative to other insurers, but only up to a certain monthly mileage. Metromile is cheaper than Geico up to 125 monthly miles and cheaper than State Farm up to 825 monthly miles.

Pay-per-mile and standard car insurance rates by mileage

Monthly rate at 0 miles
Monthly rate at 125 miles
Monthly rate at 825 miles
StandardState Farm$59$59$59

Rates are for a minimum coverage policy in the state of California, for a 30-year-old single male driver of a 2015 Honda Civic EX.

Quotes can vary substantially across insurers, so a pay-per-mile service may be more competitive with some carriers more than others. Drivers should be very mindful of their driving habits, such as daily commute, before committing to pay-per-mile car insurance.

In addition to your mileage considerations, you should also understand these potential drawbacks:

  • Pay-per-mile insurance programs are only available in select states.
  • Some carriers that offer pay-per-mile insurance policies and telematics pricing plans are relatively young and untested companies. Their financial strength to sufficiently payout claims over the long term is not tested relative to large national insurers.
  • Similarly, some customers complain of slower and inefficient claims processes with pay-per-mile programs like Metromile.

Is pay per mile worth it?

Using a pay-per-mile car insurance service can end up saving you a good deal, but only if you are an infrequent driver. If your driving habits aren't great either, you should avoid programs which track them, and can end up raising your rates more.

If you feel you pay way too much for the amount of drive, see if your company has a discount or program. Otherwise, you can see if another company's discount will end up being cheaper than your current rate. Pay-per-mile programs are likely to expand to other states in the near future as well.

Frequently asked questions

What is the best pay-per-mile car insurer?

Nationwide, Allstate and Metromile are all reputable and widely available pay-per-mile insurers. Nationwide and Allstate are both reputable regular insurers with a per-mile program, while Metromile only offers per-mile insurance.

How does pay-per-mile insurance work?

With pay-per-mile insurance, your car insurance premium has two parts: a base rate and a per-mile rate. You pay the base rate regardless of how much you drive, plus the per-mile rate multiplied by your total mileage. Your mileage is typically tracked via a smartphone app or by a device that plugs into your car.

How much does pay-per-mile insurance cost?

The typical per-mile price depends on your driving history, what car you drive and where you live, but a typical driver can expect to pay between 10 and 20 cents per mile.

Is pay-per-mile insurance better?

Per-mile insurance may be better if you don't drive your car very often. People who drive less than the national average of 12,000 miles per year are more likely to save with a per-mile plan. But if you commute every day via car or just don't like worrying about mileage every time you drive, a standard plan might be better.


To determine the average cost of pay-per-mile insurance, we collected quote data in California from Metromile to find its base monthly price and per-mile rate.

We also collected statewide average rates in California for two top insurers, State Farm and Geico, to compare pay-per-mile rates with rates for standard insurance policies.

All quotes are for a 30-year-old man who owns a 2015 Honda Civic.

ValuePenguin's analysis used insurance rate data from Quadrant Information Services. These rates were publicly sourced from insurer filings and should be used for comparative purposes only — your own quotes may be different.

Editorial Note: The content of this article is based on the author’s opinions and recommendations alone. It has not been previewed, commissioned or otherwise endorsed by any of our network partners.