Should You Switch to Pay-Per-Mile Car Insurance?

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 for coverage based on how much you drive. Because you're only paying for what you use, it can help low-mileage drivers to save money. However, it's not usually a good deal if you drive more than 12,000 miles a year.

How does pay-per-mile car insurance work?

Pay-per-mile car insurance charges a base rate per month, plus a per-mile fee. Also called pay-per-use car insurance, your monthly bill will change based on your mileage.

  • You'll pay a base rate each month, which is set by 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.
  • You'll usually pay a few cents per mile. For example, if you drove 200 miles per month at 4 cents per mile, you would be charged $8 for mileage, plus your base rate.
  • To prevent high bills after a road trip, there's a daily mileage cap. You won't pay for any miles driven beyond the cap, which is usually 250 miles per day.

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, and it's only available in about half the U.S. You can get pay-per-mile car insurance from Metromile, Allstate, Nationwide and Mile Auto.

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

If pay-per-mile car insurance isn't available near you, you may be able to use a low-mileage car insurance discount to reduce the cost of a traditional car insurance policy by up to 10%.

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How pay-per-mile differs from telematics insurance

Today, many insurance companies rely on sensors to analyze driving behavior and determine rates.

Pay-per-mile policies use these sensors to add up your mileage. However, other usage-based car insurance policies use the sensors to adjust your rates based on your driving behaviors.

Often called telematics programs, these policies use a device or mobile app to monitor speeding, hard braking or late-night driving, in addition to mileage. Drivers with safe driving habits then pay less for car insurance.

Potential discount
Allstate Drivewise10%-28%
Esurance DriveSenseVaries
Geico DriveEasyUp to 20%
Grange OnTrackUp to 25%
Liberty Mutual RightTrackUp to 30%
Show All Rows

Because these programs look at many different driving behaviors, it's not always clear how driving fewer miles impacts your rates.

The best telematics programs include those from Nationwide and Grange. These companies will only use your driving data to give you a discount. There isn't a risk that your rates will increase.

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

Pay-per-mile auto insurance can be a good deal if you drive less than 12,000 miles per year or 1,000 miles per month.

Even at a few cents per mile, driving more than 12,000 miles per year can make pay-per-use insurance very expensive.

For example, in California, if you drive less than 125 miles per month, a Metromile pay-per-mile policy is cheaper than a traditional car insurance policy from State Farm. The threshold of when it's a good deal for you depends on the many factors that affect your car insurance rates.

Monthly car insurance rates of pay-per-mile vs. a standard policy

Miles per month
Metromile (pay-per-mile)
Geico (standard policy)
State Farm (standard policy)
0 miles$26$31$59
125 miles$31$31$59
825 miles$59$31$59

Monthly 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 widely, but the rule of thumb is that people who drive very little will get the best deal with pay-per-mile car insurance. For example, if you work remotely or mostly take public transportation, pay-per-mile insurance could be a good choice.

In addition to how mileage affects your rates, there are extra drawbacks to consider:

  • Pay-per-mile insurance programs are only available in select states.
  • Some insurance companies offering these policies are relatively young and untested. They may not have the same level of financial strength to pay claims as a large insurance company.
  • Some customers complain of slower and more difficult claims processing with pay-per-mile programs like Metromile.

Is pay-per-mile worth it?

Using a pay-per-mile car insurance service can be a good deal if you don't drive much.

Also, if your driving habits aren't great, avoid using apps and plug-in devices that track them to avoid any potential rate increases. That's unless you're actively working to improve your driving habits and want an app that can help you.

If the number of miles you drive is average or high, you can save on car insurance by comparing rates from the cheapest companies and looking for other discounts such as one for not having a recent accident.

Frequently asked questions

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

Nationwide, Allstate and Metromile are all good pay-per-mile insurance companies. Nationwide SmartMiles has the best availability and could save you $540 per year if you drive 5,000 miles per year.

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 by 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 2 to 10 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 EX.

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.