Pay-per-mile car insurance companies are on the rise. With the power of telematics, it’s easier than ever for insurance companies to evaluate and reward safe driving behavior. One thing that makes you less likely to be involved in an accident is, of course, driving less.
It’s pretty simple to use pay-per-mile auto insurance. Depending on the company you use, you’ll either have a telematics device installed in your car, record driving habits via an app, or manually log miles based on your odometer reading. The less you drive, the more you can save.
So if you aren’t driving much these days due to social distancing or are just looking to reduce the number of miles you put on your car, pay-per-mile car insurance could help you save some cash.
Going low mileage isn’t the only way to save some money on insurance. The best way to make sure you save is to get quotes from different auto insurers. Insurify compares personalized quotes for you so you can make sure you’re getting the best deal on car insurance.
How much does pay-per-mile insurance cost?
When you get a quote for a pay-per-mile insurance policy, you’ll receive two quotes:
- Base rate: This is a monthly fee you pay each month. It can be a flat fee or an estimate based on a daily rate (meaning shorter months like February would cost marginally less than longer months like July).
- Mile rate: This is the rate you pay for each mile driven, as measured by your in-car device, odometer, or app, depending on your insurance provider.
The actual price you pay each month will depend on your rates and the number of miles you drive in the billing period.
How to estimate monthly costs
If you drive a consistent amount most months, you can easily estimate your monthly cost. First, multiply your average monthly mileage by your per-mile rate. Then, add the base rate.
Here’s an example. Let’s say you usually drive around 3,000 miles per month. You get quoted a $29 base rate and a $0.05/mile rate. You would pay $150 for your mileage ($0.05/mile for 3,000 miles), plus your $29 base rate, for a total monthly bill of $179.
How to save money with pay-per-mile insurance
Once you’ve estimated your monthly costs, you can plan ahead each month to control your bill. For example, if you don’t drive your car at all during a given month, you’ll only pay the base rate that period.
Without cutting driving out of your life altogether, you can still use a pay-per-mile car insurance policy to save on insurance premiums. Start by thinking about all the places you drive to in a given week, and figure out ways to scale your miles back.
You could try trading your solo commute for carpooling with a colleague. Depending on where you live, public transportation or biking can help cut costs for local trips. Or maybe you can make a change as simple as visiting the grocery store once a week instead of three times a week. Seemingly small, but consistent, changes can keep your pay-per-mile bill down—and keep extra cash in your pocket.
Companies Offering Pay-Per-Mile Auto Insurance
Metromile uses a telematics device called Metromile Pulse to offer pay-per-mile insurance to motorists in Arizona, California, Illinois, New Jersey, Oregon, Pennsylvania, and Washington. When plugged into your vehicle’s diagnostics port, the device does more than count your miles driven; Pulse also gives customers insight into the health of their car, such as any issues in your car’s exhaust, engine, or any other sub-system. So if your exhaust isn’t working properly, Pulse will send you a notification detailing the issue and how severe it is.
Metromile’s coverage options are relatively limited: with standard comprehensive and collision coverage available, you can customize your liability limits; 24/7 roadside assistance and glass repair are available as add-ons to your insurance policy.
There are no monthly limits for mileage, but those who occasionally go for a road trip will be happy to hear that daily miles charged are capped at 250 miles per day (150 miles per day in New Jersey).
Noblr bases your rates on your actual driving habits and adjusts your rates based on braking and acceleration, phone usage, road choice, time of day driving, and total mileage.
Noblr offers full coverage insurance policies. In addition to the standard comprehensive and collision options, policies automatically come with coverage for uninsured motorist bodily injury, personal injury protection (PIP), and roadside assistance.
Root is known as the first car insurance company to be based on an app only. This telematics company uses your cell phone instead of a plug-in device to measure your mileage.
Unlike some other companies that use your driving record as a rate-determining factor, Root requires all new customers to take a test drive to record their actual driving habits to get a quote.
Allstate’s Milewise insurance program adjusts your rates based on your driving habits, as measured by the Milewise device, similar to Noblr. Through the mobile app, you can view your trip information and current rates. As the sole traditional insurance company on this list, drivers who are intrigued by pay-per-mile but hesitant to test out a new company might feel more at ease with the Milewise program.
Some traditional car insurance companies give customers the option to use telematics to save money. Here are a few programs that offer discounts for app- or device-recorded driving habits, including low mileage:
The easiest way to compare car insurance companies is by using Insurify. In a matter of minutes, you can create your personal profile and see live quotes side by side.
Is pay-per-mile insurance the right fit for me?
Pay-per-mile insurance may not be the best fit for everyone, but low-mileage drivers may be able to save money by going the pay-per-mile route.
Typically, drivers who travel less than 10,000 miles annually would be considered low-mileage drivers. Just keep in mind that with telematics companies, it’s not only the number of miles that you drive that can be considered. Other safe driving features like braking and speed are sometimes measured to determine your price.
The Best Way to Save on Car Insurance
Car insurance rates can be based on several factors, including your driving history, where you live, your vehicle type, and even your credit history. With so much impacting your rates, the best and only way to save on car insurance is by comparing quotes. Insurify lets you see car insurance quotes in real time based on your unique profile. Give it a try today.
FAQ: Pay-Per-MIle Car Insurance
How much is pay-per-mile insurance?
Pay-per-mile insurance rates vary more than standard policies because it depends on how much you drive. How much you pay for a pay-per-mile insurance policy will depend on three factors: A fixed, base rate: the flat monthly rate you are quoted for your policy A variable, per-mile rate: the dollar amount you pay per mile you drive Your monthly mileage: how many miles you drive in your billing period Low-mileage drivers may be able to save money by choosing a pay-per-mile insurance policy, but your odometer shouldn’t be the only thing you consider when comparing policies. To make sure you get the best deal, try comparing policies with Insurify. You’ll find your lowest possible rates for any type of insurance company—based totally on your driver profile.
What companies offer pay-per-mile insurance?
Metromile, Noblr, and Root are some of the most well-known pay-per-mile insurance companies on the market. These companies are app-based and use telematics to offer drivers pay-per-mile policies. While not many traditional car insurance companies provide pay-per-mile insurance, many offer discounts through their own telematics programs (either by device or mobile app). Esurance, Progressive, Nationwide, and State Farm all offer discounts based on information that includes miles driven.
What is pay-per-mile auto insurance?
Pay-per-mile auto insurance is an insurance policy that charges drivers based on the actual mileage driven in a period. Most pay-per-mile insurance companies use a telematics device to track miles driven, as well as other driving behaviors.
Conclusion: How to get the best and cheapest car insurance
The best car insurance isn’t always the cheapest, but that doesn’t mean you can’t find the best deal for your needs. The only way to know if you’re getting the best deal is to compare personalized quotes between companies. Insurify uses your information to get quotes in real time, letting you find the best price on the best policy for you. Give it a try today to see how much you can save.