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Licensed auto and home insurance agent
4+ years experience in insurance and personal finance editing
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Licensed property and casualty insurance agent
10+ years editing experience
NPN: 21630969
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30+ years in financial services
Clinical Professor of Finance, University of San Diego
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7+ years experience in data analysis
Ph.D. in Computational Biology
Updated
Pay-per-mile car insurance is an innovative type of car insurance that rewards policyholders who drive less with potentially lower rates. As the name indicates, insurance companies typically charge you by the mile on top of a base rate for pay-per-mile insurance.
This type of coverage presents a cost-effective option for remote workers, retirees, self-employed people, and infrequent drivers. You can purchase this coverage through Mile Auto, Nationwide’s SmartMiles program, and other companies.
Most pay-per-mile car insurance programs charge a monthly base rate and a low per-mile cost.
You may see insurers refer to pay-per-mile with many different terms, including pay-as-you-go, pay-as-you-drive, and pay-how-you-drive.
If you drive less than the national average of 13,473 miles per year, pay-per-mile car insurance could save you money.
Pay-per-mile insurance uses telematics to track the number of miles you drive each month and charges you a monthly base rate plus a low per-mile fee.[1]
This type of coverage is ideal for people who work from home, use public transportation, are retirees, or are self-employed. Pay-per-mile insurance companies typically have a daily mileage cap or a limit on the number of miles you pay for.
Premium variability is the main difference between traditional and pay-per-mile car insurance. Purchasing traditional auto insurance may allow you to better plan for how much you’ll pay for coverage each month and year. Rates for pay-per-mile coverage fluctuate based on driving activity, in contrast, but will ideally cost less for low-mileage drivers than traditional insurance.
Compare rates from leading insurers
Pay-per-mile insurance starts with a low monthly base rate, tracks the number of miles you drive in a month, and applies a low per-mile fee to arrive at each month’s total premium amount. Here’s how pay-per-mile insurance works:
Start with a monthly base rate.
Track the miles you drive in a month.
Multiply your miles by the per-mile charge.
Pay the total premium (base rate + total per-mile charge).
Insurers track miles in different ways. Some use telematics devices installed in your vehicle or your vehicle’s built-in telematics. Others rely on a mobile app you download to your phone, and at least one allows you to take a picture of your odometer and send it in as proof of miles driven.
Pay-per-mile insurance typically offers the standard coverage. But company size may affect your options. For example, pay-per-mile coverage from large insurers like Nationwide and Allstate offers access to all the company’s coverages. Smaller companies like Mile Auto only offer the state minimum, full coverage, and a couple of optional coverages. In general, here are the coverages you can expect from a pay-per-mile company:
Every state except New Hampshire requires drivers to carry liability insurance, which pays for damage to the other vehicle and injuries to the other driver and passengers in an accident you’re at fault for.
Collision insurance is an optional coverage that’s part of full-coverage car insurance. It can pay to repair your car if it’s damaged in an accident. If you lease or finance your car, your leasing company or lender will likely require you to buy full-coverage insurance.
If your car is stolen or suffers damage caused by something other than an accident, comprehensive coverage can pay to repair or replace your vehicle. Comprehensive insurance is also part of full coverage, so you may have to buy it if you lease or finance your car.
Pay-per-mile insurance can be a good option if you don’t drive a lot. But it’s not for everyone, so it’s important to weigh the advantages and disadvantages before you buy a policy.
Low-mileage drivers can see significant savings
Both full-coverage and liability-only pay-per-mile coverage available
Some insurers don’t charge for mile overages
Not available in every state
Not available from every insurer
Telematics devices may raise privacy concerns
Not all car insurance companies offer pay-per-mile insurance. Comparing multiple insurance companies will help ensure you’re securing the best rate and coverage possible. Learn more about the best pay-per-mile insurance companies below.
Company  | Base Rate | Per-Mile Rate | Availability | Best For |
|---|---|---|---|---|
| Mile Auto | Varies based on standard rating factors | Varies based on standard rating factors | AZ, CO, FL, GA, OH, OR, TN, TX | Simple mileage tracking |
| Nationwide SmartMiles | Varies based on standard rating factors | Varies based on standard rating factors | Nationwide except AK, HI, LA, NC, NY, and OK | Broad availability area |
| Allstate Milewise | Varies based on standard rating factors | Varies based on standard rating factors | AZ, DE, FL, ID, IL, IN, MD, MA, MI, MN, MO, NJ, OH, OK, OR, PA, RI, SC, TX, VA, WA, WV | Unlimited option charges only a daily rate (not a per-mile fee) |
| User Reviews | 4.5 |
|---|---|
| IQ Score The Insurify Quality (IQ) Score uses more than 15 criteria to objectively rate insurance companies on a one-to-ten scale. The Insurify editorial team researches insurer data to determine the final scores. | 8.8 /10 |
| Liability Only Liability-only insurance, sometimes called minimum-coverage insurance, pays for bodily injury and property damage to others in an accident the policyholder causes. It does not pay for the insured’s own damages. | $74/mo |
| Full Coverage Full-coverage car insurance generally includes liability, collision, and comprehensive coverage, and may include other optional coverages such as uninsured motorist coverage. Collision covers a policyholder’s repair or replacement costs in case of an accident. Comprehensive covers damages caused by non-accident events. The average quote displayed here reflects policies with the following coverage limits: $50,000 bodily injury liability per person; $100,000 bodily injury liability per accident; $50,00 property damage liability per accident; $1,000 collision deductible; and a $1,000 comprehensive deductible. | $137/mo |
Mile Auto's score | Industry average | |
|---|---|---|
| Coverage options | 4.0 | 3.2 |
| Customer service | 3.4 | 3.6 |
| Discounts | 4.0 | 2.9 |
| Policy transparency | 3.9 | 3.1 |
| Value | 4.0 | 2.9 |
Drivers appreciate the quality service but find the rates high and claim processing slow.
One of the leading low-cost companies for pay-per-mile insurance, Mile Auto focuses exclusively on this coverage type. The company claims that drivers can save up to 30% or 40% on car insurance when compared to current rates for traditional insurance.
Instead of using a tracking device, Mile Auto has drivers send periodic photos of their odometer.
Low-mileage drivers may see significant savings
You don’t have to install a telematics device in your car
Offers roadside assistance and rental reimbursement add-ons
Available in only seven states
No bundling or discount opportunities
No scores from J.D. Power or the National Association of Insurance Commissioners
| User Reviews | 4.3 |
|---|---|
| IQ Score The Insurify Quality (IQ) Score uses more than 15 criteria to objectively rate insurance companies on a one-to-ten scale. The Insurify editorial team researches insurer data to determine the final scores. | 9 /10 |
| Liability Only Liability-only insurance, sometimes called minimum-coverage insurance, pays for bodily injury and property damage to others in an accident the policyholder causes. It does not pay for the insured’s own damages. | $93/mo |
| Full Coverage Full-coverage car insurance generally includes liability, collision, and comprehensive coverage, and may include other optional coverages such as uninsured motorist coverage. Collision covers a policyholder’s repair or replacement costs in case of an accident. Comprehensive covers damages caused by non-accident events. The average quote displayed here reflects policies with the following coverage limits: $50,000 bodily injury liability per person; $100,000 bodily injury liability per accident; $50,00 property damage liability per accident; $1,000 collision deductible; and a $1,000 comprehensive deductible. | $187/mo |
Nationwide's score | Industry average | |
|---|---|---|
| Coverage options | 4.1 | 3.2 |
| Customer service | 4.0 | 3.6 |
| Discounts | 3.7 | 2.9 |
| Policy transparency | 3.9 | 3.1 |
| Value | 3.5 | 2.9 |
Drivers appreciate the helpful and knowledgeable customer service but dislike the frequent and significant rate increases. Some also found the claims process to be slow and frustrating.
Nationwide’s SmartMiles program offers pay-per-mile coverage and a 10% safe driver discount after renewal. Under this program, policyholders have a daily mileage cap of 250 miles.
Offers 24/7 roadside assistance coverage add-on
SmartRide (for safe drivers) and SmartMiles (for low-mileage drivers)
Accident forgiveness available
Below-average customer satisfaction scores from J.D. Power
Some discounts and programs not available in all states
Not available in every state
| User Reviews | 3.8 |
|---|---|
| IQ Score The Insurify Quality (IQ) Score uses more than 15 criteria to objectively rate insurance companies on a one-to-ten scale. The Insurify editorial team researches insurer data to determine the final scores. | 8.9 /10 |
| Liability Only Liability-only insurance, sometimes called minimum-coverage insurance, pays for bodily injury and property damage to others in an accident the policyholder causes. It does not pay for the insured’s own damages. | $72/mo |
| Full Coverage Full-coverage car insurance generally includes liability, collision, and comprehensive coverage, and may include other optional coverages such as uninsured motorist coverage. Collision covers a policyholder’s repair or replacement costs in case of an accident. Comprehensive covers damages caused by non-accident events. The average quote displayed here reflects policies with the following coverage limits: $50,000 bodily injury liability per person; $100,000 bodily injury liability per accident; $50,00 property damage liability per accident; $1,000 collision deductible; and a $1,000 comprehensive deductible. | $146/mo |
Allstate's score | Industry average | |
|---|---|---|
| Coverage options | 3.8 | 3.2 |
| Customer service | 3.9 | 3.6 |
| Discounts | 3.8 | 2.9 |
| Policy transparency | 3.7 | 3.1 |
| Value | 3.3 | 2.9 |
Drivers appreciate the friendly customer service and efficient claims processing, but many find the rates too high and experience unexpected price increases. Some also report poor communication from agents.
Allstate’s pay-per-mile program, Milewise, tracks your mileage and gives feedback on your driving habits. It charges a per-mile rate as well as a low daily rate; policyholders still pay the daily rate even if they don’t drive that day.
Milewise offers two options: a traditional pay-per-mile policy and Unlimited, which only pays the daily rate and not a per-mile rate.
Ample opportunities for bundling discount
Offers a pay-per-mile option
A+ (Superior) financial strength rating from AM Best
Low customer satisfaction
Rates are merely average compared to other insurers
Below-average rank for customer satisfaction in many regions, according to J.D. Power’s 2024 U.S. Auto Insurance Study
Savings from pay-per-mile insurance can vary widely, based on insurer, state, your driving profile, and more. Insurify data points to average savings of 25%–38% for liability-only pay-per-mile versus standard minimum coverage, and 27%–40% for full coverage.
Pay-per-mile insurance companies use the same rating factors as standard insurers to set your base rate and per-mile rate. That means your age, gender, driving record, credit, vehicle make and model, and coverage choices will affect your rate, along with how many miles you actually drive per month.
Check quotes from 120+ top insurance companies
The primary benefit of pay-per-mile insurance is the potential for paying less for car insurance. The fewer miles you drive, the less you have to pay for car insurance coverage. People who drive a lot for work and other regular commutes don’t benefit from this insurance model.
Pay-per-mile insurance can make a lot of financial sense for certain groups of people, including:
Remote workers
Retirees
Students who live near campus
Low-mileage drivers
People who drive less than 10,000 miles per year
Work-from-home employees
Drivers with second vehicles
Occasional drivers
Before making the switch to pay-per-mile insurance, compare your options and find answers to common questions about this type of coverage below.
Auto insurers use telematics devices to help track your mileage and driving behavior, which qualifies as usage-based insurance. Telematics car insurance may be used to offer you discounts for safe driving, but pay-per-mile insurance regularly tracks your miles to assess rates. What gets tracked and how your miles or behavior determines your rates vary by insurer.
Pay-per-mile car insurance can be a money-saving option for people who drive very little — such as remote workers, public transportation commuters, seniors, and teens. A low monthly base rate and per-mile charge could cost less than standard car insurance for low-mileage drivers.
Lemonade bought Metromile in 2022, so the company is no longer writing policies. Lemonade offers pay-per-mile policies in Arizona, Washington, and Oregon.
Allstate offers a pay-per-mile insurance option called Milewise. This option works well for low-mileage drivers, such as employees who work from home, retirees, and people who take public transportation frequently. If you live in one of the 21 states with Milewise available, you can get a low daily rate and save money on insurance if you drive infrequently.
Insurance companies that offer pay-per-mile insurance typically require you to install a telematics device in your car that pairs with a mobile app. This sends mileage data to the company to help determine rates. Some other companies, like Mile Auto, may allow you to regularly take photos of the odometer instead of installing a device.
In general, pay-per-mile coverage is best suited for people who drive less than the federal average of 13,000 miles per year, or about 36 miles per day.[2]
Track your mileage for a month to see how much you actually drive if you’re considering a policy.
If you drive infrequently and are generally a safe driver, you may be able to save with pay-per-mile insurance. But it’s not good for people who frequently drive long distances.
Yes. Most companies that offer pay-per-mile insurance allow you to buy both liability-only and full-coverage policies.
Generally, driving less than 10,000 miles per year is considered low mileage for car insurance.
Insurify data scientists analyzed more than 190 million quotes served to car insurance applicants in Insurify’s proprietary database to calculate the premium averages displayed on this page. These premiums are real quotes that come directly from Insurify’s 500+ partner insurance companies in all 50 states and Washington, D.C. Quote averages represent the median price for a quote across the given coverage level, driver subset, and geographic area.
Unless otherwise specified, quoted rates reflect the average cost for drivers between 20 and 70 years old with a clean driving record and average or better credit (a credit score of 600 or higher).
Liability-only premium averages correspond to policies with the following coverage limits:
Quotes for Allstate, Farmers, GEICO, State Farm, and USAA are estimates based on Quadrant Information Services’ database of auto insurance rates.
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Licensed auto and home insurance agent
4+ years experience in insurance and personal finance editing
NPN: 20564519
Featured in
Licensed property and casualty insurance agent
10+ years editing experience
NPN: 21630969
30+ years in financial services
Clinical Professor of Finance, University of San Diego
7+ years experience in data analysis
Ph.D. in Computational Biology
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