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If you could pay for car insurance by the mile, would you? It's probably not a good idea if you have a long commute, take a road trip every other month, or drive for a rideshare company like Uber or Lyft, but it is an appealing option for low-mileage drivers. 

Car insurance rates typically depend on factors, like the type of vehicle, the driver's age, and driving record. Some states even look at credit history and the length of time customers have held onto their current policies. 

You may be wondering why mileage isn't a larger factor in the equation. If you're a student who travels only to and from classes each day, for example, shouldn't you pay less than someone who travels all day for work? After all, the less you're on the road, the lower your risk of getting into an accident.

That's where pay-per-mile car insurance comes in. This type of coverage replaces your traditional car insurance policy, and the main difference is that you pay for auto insurance by the mile. Insurers that provide this type of coverage still look at the factors above, but with pay-per-mile insurance, more than half the rate can be based on mileage. If you put only a few miles on your car every year, the savings can be worth making the switch.

How Does Pay-Per-Mile Car Insurance Work?

With pay-per-mile car insurance, you pay a base rate plus a per-mile rate for the miles you drive. When you sign up, the insurance company sends you a wireless device that you plug into your car, usually into the OBD-II port underneath the steering wheel. The company uses this device to keep track of how many miles you drive, which determines your rate along with other factors including driving history, the vehicle type, and location.

Companies have been offering in-car telematics devices for a few years now. However, pay-per-mile insurance is different from pay-as-you-go programs like Progressive's Snapshot, Allstate's Drivewise, and State Farm's Drive Safe and Save, which track your driving behaviors with an in-car device and give you discounts based on your safe driving. 

When you buy car insurance by the mile, the device primarily tracks the amount of miles you drive, though it is important to note that many of these companies also track your driving behaviors. 

The major difference between pay-per-mile and pay-as-you-go is that most pay-per-mile insurance companies do not directly penalize you for high-risk driving behaviors, such as hard braking, taking off quickly from a stop, aggressive turning, and late-night driving. With programs like Snapshot and Drivewise, you could be charged a higher rate if the insurance company detects you are driving aggressively. 

That's not to say that pay-per-mile insurers don't monitor these behaviors, but they do not base your rate primarily on driving behavior data collected by the in-car device. Think of pay-per-mile policies as usage-based insurance rather than driver-based insurance.

Is Pay-Per-Mile Car Insurance Right for Me?

According to the U.S. Department of Transportation, the average driver racks up just under 13,500 miles per year. If you drive much less than that, pay-per-mile car insurance could be right for you.

There are several different groups of people who could benefit from having pay-by-mile car insurance. More and more people are working from home these days, and if you're one of them, you're probably driving fewer and fewer miles. Even if you drive into work, you might live and work in the same area, only drive on weekends, or have a second car that you rarely drive. College students, retirees, and those who only drive on Sundays are also good candidates for pay-by-mile insurance.

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It's also good for drivers who want low-mileage discounts on their insurance but don't want to be monitored and penalized for their driving behaviors. That's because most of these policies do not base your premium primarily on driving behavior data collected by the in-car device.

Traditional car insurance policies base premiums on factors such as a driver's age, credit score, and driving record, but rates for pay-per-mile car insurance depend less on those factors and more on how many miles you drive. It could be a good idea for low-mileage drivers who are young or have bad credit, a poor driving record, or a lapse of insurance coverage. 

This type of insurance policy could also be a good fit for leaseholders with tight mileage restrictions. There are several low-mileage lease programs from automakers like Chevrolet, Cadillac, GMC, and Buick that allow up to 10,000 miles per year. 

Pay-per-mile car insurance is not a good fit for some drivers, such as those who have a long commute to work. It's also not suitable for drivers who take frequent road trips, though some pay-per-mile auto insurance policies offer travel grace periods. Some of these providers also don’t charge you for any miles in excess of 250 in a single day.

Does Pay-Per-Mile Car Insurance Really Save You Money?

With this type of policy, your insurance premium consists of a base rate and a per-mile rate, and your savings depends largely on how much you drive. Let's assume that your base rate is $40 per month and your per-mile rate is 6 cents a mile. 

In this example, if you drive just 500 miles per month, the total monthly cost is the base rate of $40 plus the per-mile rate of $30 (500 miles multiplied by 6 cents). That adds up to $70 per month. But what if your mileage is closer to the national average of 13,500 miles? In that case, your base rate would still be $40 per month, but your per-mile rate would jump to about $68, putting your total monthly premium at nearly $110 per month. 

A savings of $40 does not sound like a lot on a monthly basis, but over the course of a year, the low-mileage driver pays $840 while the higher-mileage driver is charged $1,320. That amounts to an increase of $480 per year, or 57%. 

If you drive 18,000 miles annually, the cost jumps to $1,560 per year. In this example, the difference in cost for the low-mileage driver and the highest-mileage driver is $720, representing an 85% yearly rate increase just for driving 1,000 extra miles every month. This does not take into account road-trip exceptions that some pay-per-mile providers offer.

If your annual mileage is closer to the low-mileage driver in this example, you might want to consider pay-by-the-mile car insurance. If your annual mileage is closer to or higher than the national average of 13,500 miles, you should closely compare rates from multiple insurers to maximize savings and get the flexibility you need.

This can be especially attractive if you want your rate to depend more on the miles you drive than other factors like your age, credit score, and driving record. If that's the case, pay-per-mile auto insurance could save you money because the rate depends more on the miles you drive than any other factor.

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What Is the Best Pay-Per-Mile Car Insurance?

The leading companies that offer auto insurance by the mile are Metromile, Milewise from Allstate, SmartMiles from Nationwide, and Mile Auto Insurance. Much like a normal insurance policy, you can purchase common types of coverage options, such as liability, comprehensive, collision, and uninsured motorist coverage. These providers also offer add-ons for things like roadside assistance and a rental car if your vehicle is in the shop for a covered accident.

With these insurers, you get an in-car device and a mobile app that gives you information like the number of miles you drive. Some of these companies don’t charge you for any miles over 250 in a single day.

Here's a rundown of the best pay-per-mile car insurance companies.


San Francisco-based Metromile offers base rates as low as $29 per month, and the company claims to save customers an average of about $740 per year. As of this writing, Metromile operates in Arizona, California, Illinois, New Jersey, Oregon, Pennsylvania, Washington, and Virginia, but the company plans to expand in the future. 

Metromile requires you to install a device in your car called the Metromile Pulse. It plugs in just beneath the steering wheel in most vehicles.

There are a few pros and cons to Metromile insurance. If you carry comprehensive and collision coverage on your policy, the company provides pet injury protection at no additional cost. Metromile does not offer rental-only car insurance, and it does not cover rideshare drivers.

Allstate Milewise

Milewise from Allstate offers drivers coverage that is comparable to what you get from a traditional Allstate auto insurance policy, but the difference is that you pay a monthly base rate and a per-mile rate. 

This provider operates in more states than smaller insurers like Metromile. As of this writing, coverage is available in Arizona, Delaware, Idaho, Illinois, Indiana, Maryland, New Jersey, Ohio, Oregon, Texas, Virginia, Washington, and West Virginia. 

Milewise uses a device to track your driving behavior and bases your rate, at least in part, on behaviors like hard acceleration and braking, as well as the time of day that you drive. However, it does not offer a safe-driving discount like Allstate's Drivewise program, which includes a 3% discount for signing up to have your driving behaviors tracked, as well as a potentially larger discount as your behaviors are monitored.

Allstate also owns Esurance, another provider of pay-per-mile auto insurance and discounts.

Nationwide SmartMiles

With SmartMiles, an in-car device tracks your mileage and driving behaviors. You pay a per-mile rate, and you could earn a discount based on your safe driving. 

This program is not to be confused with SmartRide, which is a feature of traditional Nationwide policies that gives you a 10% participation discount and a potentially larger discount when you renew your policy. With SmartMiles, you could earn a 10% discount for safe driving, but only after an initial evaluation period. 

At the time of writing, SmartMiles covers an even larger portion of the country than Allstate. It operates in Arizona, Colorado, Connecticut, Iowa, Idaho, Illinois, Indiana, Maryland, Maine, New Hampshire, New Mexico, Nevada, Ohio, Oregon, Pennsylvania, Texas, Utah, Virginia, Vermont, Washington, Wyoming, and the District of Columbia.

Mile Auto

Another insurer in the business of selling auto insurance by the mile is Mile Auto. The company claims that members save up to 40% off their current rates when they switch. 

What sets Mile Auto apart from the rest is that it does not require you to install a device in your car, which could be a relief if you're concerned about privacy. Mile Auto does not track your driving behaviors by using an in-car device, but that also means they do not offer a safe-driving discount. Mile Auto instead tracks your mileage using a smartphone app.

Another downside is that Mile Auto Insurance only operates in three states as of this writing: Georgia, Illinois, and Oregon. This is a smaller coverage area than Metromile. In fact, it's the smallest coverage area of any of the pay-per-mile insurers we cover.

What Are the Pros and Cons of Pay-Per-Mile Car Insurance?


The major benefit of pay-per-mile auto insurance is that you could pay less for car insurance than you would with a traditional policy that does not track mileage. Although many pay-per-mile car insurance companies offer low-mileage discounts that can reduce your premiums, many of them do not charge on a strict per-mile basis.

Insurance companies using in-car wireless trackers is nothing new, and many providers offer safe-driving discounts for policyholders who agree to have a device installed in their car to track certain driving behaviors, such as sharp turning, hard braking, flooring the gas pedal, and late-night driving. The less you do these things, the lower your rates are with some companies.

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With most pay-per-mile auto insurers, however, your rate is primarily based on the number of miles you drive and not these other factors. That said, keep in mind that many of these devices still track your driving behaviors, and some loosely base your monthly or per-mile rate on this data.

Another benefit of buying auto insurance by the mile is that your insurance premiums depend less on traditional factors like your age, credit score, and driving record and more on the number of miles you put on your car. 


The biggest risk with pay-per-mile car insurance is a sudden increase in your annual mileage. If your annual mileage surges because you move to a new area or get a new job, you could see steep increases in your overall monthly auto insurance costs. In this case, it could end up costing you more than a traditional auto insurance policy.

Some people could have privacy concerns about the use of trackers by many of the pay-per-mile auto insurance companies. Many pay-per-mile insurers primarily track your mileage with these devices, but they can also track things like your driving behavior, your location, and the time of day that you drive. 

Another drawback of pay-per-mile car insurance is that it is not yet available nationwide. As of this writing, none of the auto insurers above offer pay-per-mile insurance in Alabama, Alaska, Arkansas, Florida, Hawaii, Kansas, Kentucky, Louisiana, Massachusetts, Michigan, Minnesota, Mississippi, Missouri, Montana, Nebraska, New York, North Carolina, North Dakota, Oklahoma, Rhode Island, South Carolina, South Dakota, Tennessee, and Wisconsin.

Lastly, this type of insurance might not be allowed by some loan and lease companies. If you finance or lease your vehicle, you'll want to check with your lender or lessor to see if the vehicle can be covered by pay-per-mile insurance.

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

Before you make the switch to a pay-per-mile auto insurance provider, you should give your current insurance company a call. You'll want to verify the levels of coverage between your current policy and the one you're considering. You want to make sure that the liability, comprehensive, collision, and uninsured motorist coverage limits in your current policy are comparable to the policy you are thinking about getting. 

This is a good time to mention to your current insurer that you are shopping around for car insurance. It's always a good idea to comparison shop, but don't forget to check with your current provider to see if they can offer you a more competitive rate. When met with the prospect of losing a customer, many insurance companies may offer lower pricing or rate discounts to keep your business. Your current insurer may be able to offer you a low-mileage discount that will make up for the difference in cost between your current premiums and your quoted pay-per-mile insurance costs. 

More Car Insurance Buying Tools From U.S. News & World Report

We know that shopping around for car insurance is probably not something you want to spend a lot of time doing. Doing your research can save you serious money, however, both when you buy the insurance and when you make a claim. U.S. News & World Report has the resources you need to navigate today's auto insurance world. Our car insurance hub will lead you to articles on how car insurance works, coverages you need, car insurance discounts you might qualify for, and the country’s best car insurance companies.

The Best Car Insurance Companies in 2020

Our Car Insurance Ranking

  1.     USAA
  2.     Geico
  3.     Allstate
  4.     State Farm
  5.     Farmers
  6.     Progressive
  7.     American Family
  8.     Nationwide
  9.     Travelers

The Cheapest Car Insurance Companies in 2020

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