What Is Pay-Per-Mile Car Insurance?

Don't drive often? You could save a ton of money by switching to pay-per-mile insurance. Learn how it works and which companies offer it here.
Person driving car with pay-per-mile auto insurance

Does your car spend a lot of time in the garage? If your car gets little action, it may be a smart move to switch to pay-per-mile car insurance. For people who drive less, paying by the mile for coverage can be a great alternative to a normal policy.

Pay-per-mile car insurance is as simple as it sounds. Once you sign up, you’ll only pay for the miles you drive, plus a monthly or daily rate (which is meant to be much smaller than normal rates). For many people, paying by the mile is a fantastic way to save money on car insurance. However, if your car is on the road a lot, it may not be the best choice.

In this article, we’ll take a look at how pay-by-mile insurance works. You’ll also learn about who this type of policy is ideal for. And, of course, we’ll list the companies you can get pay-per-mile insurance from, as well as which states allow it.

How Pay-Per-Mile Car Insurance Works

Pay-per-mile insurance is a type of policy that charges you for how much you drive. Insurers charge you a monthly or daily rate, plus a small charge per mile. For example, let’s say your carrier charges you $30/month and $0.06/mile. If you drove 800 miles in one month, you’d pay $78/month, $48 for the mileage, and $30 for the flat rate.

According to Metromile, a leading pay-by-mile insurer, you’ll maximize your savings if you drive 10,000 miles or less annually. Any more than that, and you may end up paying more than you would with a traditional auto insurance policy.

Some insurance companies may also collect data about your driving habits as part of their pay-per-mile programs. This data is often to help providers give you discounts for safe driving or low mileage. However, some insurers may raise your rates for poor driving habits.

How Insurers Collect Mileage Data

For you to pay by the mile, your insurer must track your mileage via “telematics.” In this case, telematics refers to vehicle tracking systems. Providers use this technology to track your mileage and other driving habits, such as accelerations, stops, and speed.

When you sign-up for pay-by-mile insurance, you’ll need to either install a device in your car or download an app to your phone.

Who Needs It

Pay-per-mile insurance is great for anyone who drives less than 10,000 miles per year. This typically includes people who:

  • Work remotely
  • Have a short commute
  • Are retired and rarely drive
  • Attend college
  • Have an extra car that hardly gets driven

Who Shouldn’t Have It

While switching to a pay-by-mile plan can save people lots of money, it’s not for everyone. If you drive more than 10,000 miles per year, you might want to rethink switching from a traditional policy.

Is Pay-Per-Mile Cheaper Than a Regular Policy?

Depending on how much you drive, pay-per-mile can be cheaper than a regular auto insurance policy. As we’ve mentioned throughout the article, those who drive less than 10,000 miles per year will likely see the most savings.

Ultimately, pay-per-mile is only worth it for those who don’t drive much. If you find yourself driving frequently, you’re better off with a traditional policy. The best way to know if switching to pay-by-mile is worth it is to get car insurance quotes and weigh the costs.

Normal Rate Factors Still Apply

Even though you’ll be paying by the mile, your rates are still subject to normal rate factors. Rate factors include details about you that indicate your risk, such as your driving record or age. Here’s a list of major rate factors insurers may use to calculate your rates:

  • Age
  • Car make and model
  • Credit score
  • Driving record
  • Gender
  • Marital status
  • Where you live

Note that the factors above impact your flat and per-mile rates. Then, your final monthly premium is tallied based on how much you drive.

Which Companies Have Pay-Per-Mile Car Insurance?

At this time, you only have a few options if you want to switch to pay-per-mile car insurance. Each company runs its program in a similar way, but there are key differences. Here’s a list of the companies that offer pay-per-mile insurance and a breakdown of how each program works:


You can get pay-per-mile car insurance from Allstate with Milewise. Customers pay a daily cost, which is comprised of a flat and per-mile rate. To use Milewise, you must install a device in your car’s OBD port. Then, you can download Allstate’s iOS or Android app to monitor driving habits and costs.

Milewise has two classifications for a car, depending on usage: Pay-Per-Mile and Unlimited. Here’s the difference between the two:

  • Pay-Per-Mile. This is for low-mileage vehicles. You’re charged a daily rate and a per-mile rate.
  • Unlimited. Ideal for higher mileage cars. Allstate only charges you a daily rate, letting you drive as much as you want.

Note: Allstate’s Milewise is only available in AZ, D.C., DE, FL, ID, IL, IN, MA, MD, NJ, OH, OK, OR, PA, TX, VA, WA, WI, and WV.


Metromile is a well-known pay-per-mile provider. To track your usage data, you’ll need to install a device in your car. Then, you’ll pay a monthly base rate plus a per-mile rate. You can also download an app to view your mileage, costs, and other driving-related info.

Note: Metromile is only available in AZ, CA, IL, NJ, OR, PA, VA, and WA.

Mile Auto

Unlike other pay-by-mile insurers, Mile Auto doesn’t require you to install a device in your car. All you need to do is sign up, then you’ll send a monthly photo of your odometer. You’ll pay for the miles you drive, plus a monthly base rate.

Note: Mile Auto is only available in AZ, CA, GA, IL, OH, OR, PA, TN, and TX.


Nationwide’s SmartMiles is another way to get pay-per-mile insurance if you drive infrequently. Your monthly costs are made up of a base rate and a cost-per-mile rate. Nationwide requires you to install a device in your car to track your driving habits and mileage.

In addition to pay-per-mile, SmartMiles also gives you the following perks:

  • 10% safe driving discount
  • Road trip exception – only the first 250 miles count toward your rates
  • Access to a mobile app to track your mileage and driving behavior

Note: Nationwide’s SmartMiles is not available in AK, HI, LA, NC, NY, and OK.

USAA (Noblr)

USAA’s Pay as You Drive by Noblr is another usage-based insurance option that’s exclusive to military families. You’ll pay a base and per-mile rate each month. To use Pay as You Drive, you’ll need to install a mobile app on your phone, which will collect your mileage data.

Your mileage isn’t all the USAA app will track. It also tracks your driving habits. Good habits will lower your rates, while poor ones will raise them. The following will also determine your rates:

  • How hard you brake or accelerate
  • What time of day you drive
  • Whether you drive on the highway or city streets
  • Whether you use your phone while driving

Note: USAA’s Pay as You Drive is only available in AZ, CO, IL, IN, LA, MD, MO, NM, OH, PA, TX, VA, and WI.

Compare Each Company’s Pay-Per-Mile Program

As we mentioned above, there are some key differences between each company’s pay-per-mile program. This includes crucial factors, such as tracking method and how your rates are determined. Below is a table to help you compare each insurer head-to-head:

Insurance CompanyType of TrackingRate Formula
Allstate DrivewiseDevice installationDaily rate + per-mile rate
MetromileDevice installationMonthly rate + per-mile rate
Mile AutoPicture of your vehicle’s odometerMonthly rate + per-mile rate
Nationwide SmartMilesDevice installationMonthly rate + per-mile rate
USAA Pay as You Drive (Noblr)Mobile applicationMonthly rate + per-mile rate
Note: table data is from each of the above insurers’ websites.

Frequently Asked Questions

Q: Is pay-per-mile insurance worth it?

A: If you drive less than 10,000 miles per year, pay-per-mile insurance may be worth it. Of course, how much you can save depends on your situation. You may already be getting a good deal with your current insurer as is. If you’re interested in switching to pay-per-mile, you should compare car insurance quotes against what you’re already paying to assess the market.

Q: Is coverage the same for pay-per-mile as a regular policy?

A: Yes, coverage is generally the same for pay-per-mile as a traditional policy. However, the coverage available to you will depend on your provider. Not all insurers have the same options. Metromile, a popular pay-per-mile insurer, claims to have full coverage, as well as other types, such as roadside assistance and glass repair.

Q: Is pay-per-mile insurance available in every state?

A: No, pay-per-mile isn’t available in every state. Availability varies based on which carrier you have. Some insurers, such as Metromile and Mile Auto, only offer coverage in a handful of states. On the other hand, Nationwide and Allstate allow people in many states to get usage-based insurance.

Q: Is a low-mileage discount the same as pay-per-mile?

A: No, pay-per-mile refers to a specific type of policy where you pay for exactly how much you drive, plus a flat rate. Low-mileage discounts mark down your premium because you’ve been driving less.

Q: Which company has the best pay-per-mile insurance?

A: You only have a few options if you’re looking to get a pay-per-mile policy. The best one for you depends on your situation and preferences. However, our research found that Allstate is the best telematics program, including pay-per-mile insurance. Both Drivewise and Milewise, the company’s flagship usage-based insurance programs, come with plenty of perks and are great for helping you save money.


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