Pay-per-mile car insurance, or pay-per-use car insurance, is a type of auto insurance coverage that’s best for people who don’t drive their cars very often.
Andrew HurstAndrew HurstSenior Editor & Licensed Auto Insurance ExpertAndrew Hurst is a senior editor and a licensed auto insurance expert at Policygenius. His work has also been featured in The New York Times, The Wall Street Journal, Forbes, USA Today, NPR, Mic, Insurance Business Magazine, ValuePenguin, and Property Casualty 360.&Rachael BrennanRachael BrennanSenior Editor & Licensed Auto Insurance ExpertRachael Brennan is a senior editor and a licensed auto insurance expert at Policygenius. Her work has also been featured in MoneyGeek, Clearsurance, Adweek, Boston Globe, The Ladders, and AutoInsurance.com.
Expert reviewedExpert reviewedThis article has been reviewed by a licensed Policygenius expert to ensure that sources, statistics, and claims meet our standard for accurate and unbiased advice.Learn more about oureditorial review process.
Britta M. MossBritta M. MossProperty & casualty claim consultant and expert witnessBritta M. Moss, CPCU, SCLA, AIC-M, has over 25 years of insurance industry experience. In her work as a property and casualty claim consultant, she provides consultation and expert witness services in claim handling standards, practices, and norms. She has been retained by law firms representing plaintiffs and those representing insurer defendants involved in disputes or litigation regarding coverage analysis, investigation, liability determination, damage evaluation, negotiation and settlement. She is a graduate of The Ohio State University.
Pay-per-mile car insurance (also called pay-per-use car insurance) is a policy with prices based mostly on how much you drive instead of things like your age or ZIP code. Usually, the cost of pay-per-mile auto insurance is a combination of a base rate and a per-mile rate.
Compare rates and shop affordable car insurance today
If you don’t drive often, it might be worth comparing rates from companies that offer per-use insurance. You can get per-mile insurance from specialized companies (like Metromile) or from larger carriers like Nationwide.
Pay-per-mile car insurance, also called pay-per-use insurance, has the same coverage as a standard auto insurance policy — but rates depend on how much you drive.
Pay-per-mile insurance rates are usually determined by a base rate plus a per-mile charge.
Some pay-per-mile insurance companies, like Metromile and Auto Mile, only offer per-mile coverage. A few larger companies also offer per-mile insurance.
A cost comparison between per-mile companies and regular insurance carriers shows savings from pay-per-mile insurance may not be significant.
What is pay-per-mile car insurance?
Pay-per-mile or pay-per-use car insurance is like normal car insurance, except the cost is based on how much you drive instead of the usual factors that go into your car insurance rates.
The final cost of pay-per-mile insurance is usually a base rate plus a per-mile charge, along with any fees (those are up to the car insurance company).
While the methods that insurance companies use to calculate your rates for per-mile auto insurance are different from what normally happens when you buy auto insurance, you won’t receive less coverage if you switch your policy to pay-by-mile insurance than you would with regular car insurance.
Pay-per-mile car insurance usually works by tracking your driving. When you sign up for pay-per-mile car insurance, the insurance company will send you a device to keep in your car that will keep track of the number of miles you drive.
Your bill will vary depending on how many miles you drive, plus your base rate. Your base rate is determined by your age, location, credit, and other factors that insurance companies would usually use to calculate insurance premiums.
This means that not everyone will pay the same amount per mile — even if they live in the same city or drive the same kind of car.
As for coverage, pay-per-mile car insurance works just like a regular policy. After a crash, your coverage pays for the injuries and property damage that you caused to the other driver and their vehicle (it can also pay for damage to your own car too).
The amount of coverage in a pay-per-mile policy is up to you, just like how you choose coverage limits and deductible amounts when you buy standard car insurance.
Compare rates and shop affordable car insurance today
Like pay-per-mile insurance, usage-based car insurance calculates your rates differently from a standard policy.
But while the cost of usage-based insurance depends partly on how many miles you drive, your mileage probably won’t be the main factor that influences what you pay.
When you sign up for usage-based car insurance, your company will monitor your driving for a trial period and give you a rate (or a discount) according to things like your typical speed, braking habits, the times of day you drive, how many trips you take, and how many miles you drive.
As you might expect, pay-per-mile car insurance gets more expensive with every mile you drive. We gathered car insurance rates from two pay-per-mile companies — Metromile and Mile Auto — and found that someone who drives 2,000 miles per year pays $45 to $70 each month for coverage.
Although pay-per-mile car insurance is meant to be more affordable for infrequent drivers, we found that average rates with GEICO and State Farm were cheaper than car insurance from a per-mile company.
Pay-per-mile insurance might be worth it for someone who doesn’t drive often. You could also benefit from a per-mile plan if you’re someone who has a hard time finding cheap rates.
For example, if you’re a young driver or someone who lives in a densely populated city like New York or Chicago — where rates are among the most expensive in the country — changing to mile-based insurance could help you get cheaper insurance without sacrificing coverage.
That said, it’s not a certainty that you’ll pay less for per-mile insurance than you would for a regular policy. If you can get cheaper insurance and better service from a company that only has regular policies, pay-per-mile insurance wouldn’t be worth it.
AZ, DC, DE, FL, ID, IL, IN, MA, MD, MN, MO, NJ, OH, OK, OR, PA, SC, TX, VA, WA, WI, WV
All but AK, CA, HI, LA, MA, NC, NY, OK
While they don’t offer per-mile insurance plans, State Farm, Progressive, and USAA, do offer low-mileage discounts and that reward less frequent drivers.
If you’re thinking about switching to a pay-as-you-drive insurance plan and you already have home or renters insurance, it could be a good idea to get car insurance coverage from the same company, assuming they offer a usage-based or pay-as-you-drive option — this way, you’ll get a discount for bundling your coverage.
What’s the difference between Allstate’s Milewise and Drivewise?
Allstate offers both Milewise and Drivewise, which may sound the same but aren’t. Milewise is the insurance company’s pay-by-the mile car insurance coverage, while Drivewise is Allstate’s usage-based program that rewards car owners for safe driving. Some other companies also offer both usage-based and per-mile offerings with similar names.
Best pay per mile car insurance: Nationwide’s Smartmiles
How we score: Policygenius’ ratings are determined by our editorial team. Our methodology takes multiple factors into account, including pricing, financial ratings, quality of customer service, and other product-specific features.
Nationwide’s Smartmiles is the best pay-per-mile car insurance for its discount opportunity, availability, and road-trip perk.
If you’re thinking about switching your policy to pay-per-use auto insurance, consider Nationwide’s Smartmiles program. Unlike competitors, Nationwide has a road-trip exception feature that lets you avoid more expensive coverage for the first 250 miles of a long trip.
Nationwide also offers an additional special discount to drivers who sign up for Smartmiles. Policyholders also get a 10% discount when they renew if they were accident-free during the last policy period.
Nationwide is also the best pay-per-mile car insurance company in terms of availability, since it’s available in all but 10 states. But if you live in any of the following states, you won’t be able to opt in to Smartmiles:
Frequently Asked Questions
Is it cheaper to pay by the mile for car insurance?
It depends on how much you drive. We found that the cost of pay-per-mile car insurance is nearly equal to a standard policy for a driver who doesn’t use their car often. However, the cost of coverage from a company that specializes in per-mile insurance is much more expensive for someone who drives their car a more typical amount.
Is pay-per-mile insurance worth it?
If pay-per-mile insurance is available in your area, it’s worth comparing rates with standard companies to see which is cheaper for your driving habits. When you request a quote, you don’t have to commit to buying coverage. At worst, you’ll discover that the cost of per-mile insurance isn’t worth it near you compared to a more conventional plan.
How does low-mileage insurance work?
The cost of low-mileage insurance depends on how much you drive. Your driving history, age, location, and other factors affect your base and per-mile rates, but the more you drive ultimately determines what you pay each month.
How do I get a low-mileage discount?
When you buy car insurance, you’ll enter the number of miles you drive per year (roughly). If you drive significantly less than the average American, around 12,000-14,000 miles a year, you may automatically qualify for a low-mileage discount.
Policygenius compared the cost of pay-per-use car insurance with a typical auto insurance policy by gathering quotes for a driver in Chicago, Illinois. Our sample driver was a 30-year-old male driving a 2017 Toyota Camry. The rates in this study reflect the cost of a policy with Illinois’s minimum insurance requirements, which are:
$25,000 of bodily injury liability coverage per person
$50,000 of bodily injury liability coverage per accident
$20,000 of property damage liability coverage
We manually collected quotes from Mile Auto and Metromile, but rates from the other companies in this study were provided by Quadrant Information Services. Rates provided are a sample of costs. Your actual quotes may differ.
Andrew Hurst is a senior editor and a licensed auto insurance expert at Policygenius. His work has also been featured in The New York Times, The Wall Street Journal, Forbes, USA Today, NPR, Mic, Insurance Business Magazine, ValuePenguin, and Property Casualty 360.
Rachael Brennan is a senior editor and a licensed auto insurance expert at Policygenius. Her work has also been featured in MoneyGeek, Clearsurance, Adweek, Boston Globe, The Ladders, and AutoInsurance.com.
Property & casualty claim consultant and expert witness
Britta M. Moss, CPCU, SCLA, AIC-M, has over 25 years of insurance industry experience. In her work as a property and casualty claim consultant, she provides consultation and expert witness services in claim handling standards, practices, and norms. She has been retained by law firms representing plaintiffs and those representing insurer defendants involved in disputes or litigation regarding coverage analysis, investigation, liability determination, damage evaluation, negotiation and settlement. She is a graduate of The Ohio State University.