Pay-Per-Mile Car Insurance Guide (2023)

Pay-per-mile insurance can give low-mileage drivers serious discounts, but not all insurance companies offer this type of coverage.

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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 providers 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, Metromile, Nationwide’s SmartMiles program, and more.

What is pay-per-mile insurance?

Pay-per-mile insurance offers car insurance coverage that’s directly tied to the miles you drive. Through telematics technology, auto insurers can track your mileage and driving behavior to offer up-to-date and accurate rates.[1]

You’ll pay a base rate calculated from common factors that affect car insurance, plus a certain fee per mile you drive. Driver risk factors include age, gender, and driving history inform your base rate.[2]  Your monthly premium will vary based on the number of miles you drive, rather than remaining the same amount from month to month as with traditional car insurance policy premiums.

Consumers looking for low-mileage discounts benefit from coverage designed to reduce premiums for low mileage. But while pay-per-mile car insurance products have been around for more than a decade, some car insurance companies don’t offer this coverage option.

You may also see insurance companies use different terms for pay-per-mile insurance, including pay-as-you-go, pay-as-you-drive, or pay-how-you-drive. These terms fall under the umbrella of usage-based insurance.

See More: ​​Pleasure vs. Commuter Car Insurance

How does pay-per-mile insurance work?

When you sign up for pay-per-mile insurance, your insurance provider will generally ask you to use a telematics device to track your miles and driving data. Insurers will typically send a device for you to put in your vehicle — potentially in the on-board diagnostics port — that also communicates with a mobile app. If you don’t want to share driving data through a device, some companies, like Mile Auto, send text and email reminders to prompt drivers to submit odometer readings.

The premium your insurer charges you will vary. Combined with your per-mile fee based on your driving habits, a monthly base rate derived from various risk factors, such as location and age, forms the foundation of your rate.

Pay-per-mile insurance providers typically have a daily mileage cap, or a limit on the number of miles you pay for, which is helpful for road trips or an emergency that requires long-distance driving. For example, both Metromile and Nationwide’s SmartMiles® offer pay-per-mile programs with a mileage cap of 250 miles per day.

Premium variability represents 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. You can still choose from typical coverage options, including:

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Liability insurance

Nearly every state 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.

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Collision insurance

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.

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Comprehensive coverage

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 is also part of full coverage, so you may have to buy it if you lease or finance your car.

Learn More: Compare Car Insurance by Coverage

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Which drivers might benefit from pay-per-mile insurance?

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. Drivers 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

See Also: Cheap Car Insurance

Will pay-per-mile insurance save you money?

Whether you’ll save money with pay-per-mile insurance depends on the miles you drive on average, so you should take an inventory of your driving habits to understand how much you actually drive.

People in the U.S. drive 13,476 miles on average per year, which divides out to an average of 1,123 miles per month, according to 2022 data from the U.S. Department of Transportation Federal Highway Administration.[3] You may be a good candidate for pay-per-mile insurance if you drive far less than this national average. Metromile and Mile Auto pay-per-mile insurance, for example, both cater to drivers with 10,000 miles per year or fewer.

To understand what you might pay with pay-per-mile insurance, you can see if the company offers a set formula. Generally, insurers add the base rate to the miles driven per month, multiplied by the per-mile rate.

Learn More: Car Insurance Discount Guide

Best pay-per-mile insurance companies

Not all car insurance companies offer pay-per-mile insurance. Comparing multiple insurance providers will help ensure you’re securing the best rate and coverage possible. Learn more about the best pay-per-mile insurance companies below.

Mile Auto

One of the leading low-cost providers 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.

An example of rates offered on the Mile Auto website includes a monthly rate with a potential base rate of $48 and a per-mile rate of eight cents. A driver with this base and per-mile rate who drove 300 miles in a month would pay a $72 premium for that month. Mile Auto is currently only available in the following states: Arizona, California, Georgia, Illinois, Ohio, Oregon, Pennsylvania, Tennessee, and Texas.


Another leading contender in the pay-per-mile insurance space, Metromile claims drivers can save up to $947 per year with its coverage. The rate example on Metromile’s website includes a $29 monthly base rate and a per-mile rate of six cents. If you drive 450 miles in a month, you’d pay $56 that month for coverage.

Metromile has a daily mileage cap of 250 miles in most states, but New Jersey drivers have a cap of 150 miles per day. You’ll pay per-mile up to that amount and then your miles are free. Metromile currently offers coverage in Arizona, California, Illinois, New Jersey, Oregon, Pennsylvania, Virginia, and Washington.

Nationwide SmartMiles program 

Nationwide offers traditional car insurance as well as pay-per-mile insurance coverage through the company’s SmartMiles program. An example on the website explains you could qualify for a $60 base rate and a per-mile rate of seven cents. If you drive 500 miles in a month, you’d pay $95.

Under this program, policyholders have a daily mileage cap after 250 miles. The SmartMiles program isn’t available in Alaska, Hawaii, Louisiana, North Carolina, and New York.

Allstate Milewise program

Allstate offers both traditional car insurance and the Milewise pay-per-mile insurance program. The program’s rate breakdown differs from other pay-per-mile programs because it uses mileage and a daily base rate instead of a monthly base rate.

The company states you could have a daily rate of $1.50 and a per-mile rate of six cents. Your daily rate would come out to $2.22 if you drove 12 miles a day. Your monthly rate would be around $66 if you drove close to 12 miles each day. The program provides a mileage cap of 250 miles in most states, but drivers in Oregon, Illinois, Indiana, Ohio, and New Jersey have a mileage cap of 150 miles.

The Allstate Milewise program is currently available in Arizona, Delaware, Florida, Idaho, Illinois, Indiana, Maryland, Massachusetts, Minnesota, Missouri, New Jersey, Ohio, Oklahoma, Oregon, Pennsylvania, South Carolina, Texas, Virginia, West Virginia, Washington, and Wisconsin.

Noblr by USAA

USAA is a financial services company that works with military members. The company offers many financial products, including traditional car insurance and pay-as-you-drive insurance through a USAA company called Noblr. The company calculates rates based on how much you drive, with a premium made up of a fixed rate and a variable rate.

Noblr is currently available in Arizona, Colorado, Illinois, Louisiana, Maryland, New Mexico, Ohio, Pennsylvania, Texas, and Virginia.


The insurance providers included in the list of best companies for pay-per-mile insurance were compiled following thorough research of numerous insurers who provide pay-per-mile insurance. Special attention was paid to company offerings for coverage options, customer service, cost, mileage caps, and more.

See Also: The 10 Best Car Insurance Companies

Is there a difference between telematics and pay-per-mile car insurance?

Auto insurers use telematic 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 varies by insurer.

Pay-per-mile insurance FAQs

Before making the switch to pay-per-mile insurance, compare your options and find answers to common questions about this type of coverage below.

  • 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.

  • You can get pay-per-mile insurance in Florida through insurers like Nationwide and Allstate. Nationwide’s SmartMiles program and Allstate’s Milewise program should both be available to Florida residents.

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  • Data scientists at Insurify analyzed more than 40 million real-time auto insurance rates from our partner providers across the United States to compile the car insurance quotes, statistics, and data visualizations displayed on this page. The car insurance data includes coverage analysis and details on drivers' vehicles, driving records, and demographic information. Quotes for Allstate, Farmers, GEICO, State Farm, and USAA are estimates based on Quadrant Information Service's database of auto insurance rates. With these insights, Insurify is able to offer drivers insight into how companies price their car insurance premiums.


  1. NAIC. "Telematics/Usage-Based Insurance." Accessed February 9, 2023
  2. Insurance Information Institute. "What determines the price of an auto insurance policy?." Accessed February 9, 2023
  3. U.S. Department of Transportation Federal Highway Administration. "Average Annual Miles per Driver by Age Group." Accessed February 9, 2023
Melanie Lockert
Melanie Lockert

Melanie Lockert is the founder of the blog and author of the book, "Dear Debt." Through her blog, she chronicled her journey out of $81,000 in student loan debt. Her work has appeared on Allure, Business Insider, Credit Karma, Fortune, and more. She is also the co-founder of the Lola Retreat and host of the Mental Health and Wealth show podcast. She lives in Los Angeles and enjoys jazz music, traveling, coffee, and spending time with her two cats and partner.