Pay-per-mile insurance is a type of car insurance policy that charges a premium based on a customer’s actual mileage. With pay-per-mile car insurance, customers pay a daily or monthly base rate plus a per-mile fee of about 2-10 cents. The best pay-per-mile insurance companies are Allstate, Metromile, and Mile Auto, as they offer competitive rates and easy-to-use programs.
Best Pay-Per-Mile Insurance Companies
Since pay-per-mile insurance is a relatively new type of policy, it is not available in every state. Most pay-per-mile companies also require customers to drive a car from 1996 or later in order to be compatible with a mileage-tracking device. Lastly, it’s worth noting that pay-per-mile insurance is different from usage-based insurance programs, which track driving habits in order to give existing policyholders a discount or rebate.
How Does Pay-Per-Mile Insurance Work?
Pay-per-mile insurance charges customers a daily or monthly base rate for coverage, plus a small fee for each mile driven. Base rates and per-mile fees are calculated using standard rating factors, which include driving record, age, gender, ZIP code, and vehicle.
Most insurers track mileage using a device that plugs into the car’s OBD port under the dashboard. Most cars from 1996 and later can be used with the plug-in device, though some hybrids and electric vehicles may not be compatible.
Most pay-per-mile companies also have a mileage cap, specifying the maximum number of miles policyholders will be charged for in one day. For instance, if you drive 250 miles in one day but your mileage cap is 150 miles, then you will only be charged for the first 150 miles of your trip.
Pay-per-mile insurance is only offered by a few companies, though its availability has been gradually increasing over the past few years. Some major companies offer both standard and pay-per-mile policies, and a few smaller companies exclusively sell pay-per-mile insurance.
Learn more about how pay-per-mile insurance works.
What Pay-Per-Mile Insurance Covers
Pay-per-mile insurance covers the same types of costs as traditional car insurance policies, such as the cost to repair others’ property and the cost of others’ medical expenses if you were at fault for an accident. Like a traditional car insurance policy, pay-per-mile insurance will include your state’s minimum coverage requirements, and you can choose add-ons such as collision and comprehensive insurance to cover repair and replacement costs for your vehicle.
In addition, some pay-per-mile insurance policies often include features that may help you save more on your premiums, such as feedback on your driving habits and tips on ways to improve.
Best Pay-Per-Mile Insurance Companies
Allstate
- Pay-Per-Mile Program: Milewise
- Daily Mileage Cap: 250 miles or none, depending on the state
- Sample Rate: $1.50/day plus $0.06/mile
- Estimated Savings: 49% for policyholders who drive 5,000 miles annually
- How It Works: Customers install a mile-tracking device in their car and need to keep a credit card on file, since costs are charged to the policyholder’s account after each trip is processed
- Availability: AZ, DE, ID, IL, IN, FL, MA, MD, MN, MO, NJ, OH, OK, OR, PA, SC, TX, VA, WA, WI, and WV
Metromile
- Daily Mileage Cap: 250 miles (150 in New Jersey)
- Sample Rate: $29/month plus $0.06/mile
- Estimated Savings: An average of $741 annually
- How It Works: Customers install a mile-tracking device in their car and pay monthly
- Availability: AZ, CA, IL, NJ, OR, PA, VA, WA
Mile Auto
- Daily Mileage Cap: None
- Sample Rate: $48/month plus $0.08/mile
- Estimated Savings: 30% - 40% on average
- How It Works: Customers send a picture of their car’s odometer to the company every month and pay monthly
- Availability: AZ, CA, GA, IL, OH, OR, PA, TN, and TX
Nationwide
- Pay-Per-Mile Program: SmartMiles
- Daily Mileage Cap: 250 miles
- Sample Rate: $60/month plus $0.07/mile
- Estimated Savings: An average of $450 annually
- How It Works: Customers install a mile-tracking device in their car and pay monthly
- Availability: AR, AZ, CA, CO, CT, DC, DE, FL, GA, IA, ID, IL, IN, KS, KY, MA, MD, ME, MI, MN, MO, MS, MT, ND, NE, NH, NJ, NM, NV, OH, OR, PA, RI, SC, SD, TN, TX, UT, VA, VT, WA, WI, WV, WY
Noblr by USAA
- Pay-Per-Mile Program: Noblr
- Daily Mileage Cap: None
- Sample Rate: Not available
- Estimated Savings: Not available
- How It Works: Customers install a mobile app on their phone to track their mileage and driving habits, then pay monthly. This is technically pay-as-you-drive coverage, not a traditional pay-per-mile policy.
- Availability: AZ, CO, GA, IL, IN, LA, MD, MO, OH, NM, PA, TX, VA, and WI (must also meet USAA eligibility requirements)
Note: Availability is accurate as of April 2023.
The best pay-per-mile insurance company for each individual driver will depend on pricing and availability. For instance, drivers in South Carolina only have one option: Nationwide’s SmartMiles program. On the other hand, drivers in Arizona should compare quotes from every company to find the best deal on the coverage they need.
Learn more about the best pay-per-mile insurance companies.
Is Pay-Per-Mile Insurance Worth It?
Pay-per mile insurance is usually worth it only for people who drive less than 12,000 miles annually, which is the national average. To determine if pay-per-mile insurance is worth it for your specific circumstances, you should make sure to have an accurate estimate of your annual mileage, then compare quotes from several companies. Pay-per-mile insurance is especially likely to be worth it for individuals who drive infrequently.
Drivers Likely to Benefit from Pay-Per-Mile Insurance:
- People who work from home
- Occasional weekend drivers
- People who walk or take public transit often
- Retirees
- College students who don’t commute to class
- Drivers of leased cars with strict mileage limits
- Individuals or families with an extra vehicle that’s rarely used
If you’re unsure whether you would save money by using pay-per-mile insurance, it’s a good idea to spend a few weeks tracking your mileage. Then, you can get quotes from multiple companies and compare how much you’d spend on pay-per-mile insurance with the cost of a standard auto insurance policy from one of your state’s cheapest insurers. To get started, check out WalletHub’s guide to cheap car insurance.
Learn more about whether pay-per-mile insurance is worth it.
Tips for Finding the Best Pay-Per-Mile Insurance
- Check the availability of pay-per-mile insurance. Pay-per-mile insurance policies are not offered in every state, and in some states, there is only a limited number of insurers that offer it. Check to see which insurance companies offer pay-per-mile in your state.
- Shop around. As with any type of insurance, it’s important to compare rates and coverage options from multiple insurance companies before making a decision. Most pay-per-mile policies charge you a flat monthly rate plus a few cents for every mile driven. It may be worth calculating your average daily mileage and doing the math for each company.
- Understand the tracking device. Most pay-per-mile insurance policies use a device that tracks your mileage, or a mobile app. Typically, the device plugs into your vehicle’s onboard diagnostic port under the dash and can capture specific driving data such as your mileage, speed, and braking. The mobile app typically captures the same data using GPS. Once you enroll in the program and download the mobile app, it can simply run in the background.
- Check for discounts. Some pay-per-mile insurance policies offer discounts for safe-driving habits, such as avoiding hard braking or not driving at night. Make sure you understand what discounts are available and how they can be applied to your premium.
- Read reviews. Research the insurance company’s reputation and read customer reviews before purchasing a policy. You can start by checking the company’s profile on WalletHub to see reviews from WalletHub users as well as the company’s ratings from consumer watchdog groups.
Video: Pay Per Mile Insurance Explained
Ask the Experts
To gain more insight about Pay-Per-Mile insurance, WalletHub posed the following questions to a panel of experts.
1. Who do you think should consider pay-per-mile car insurance?
2. Why don’t more insurance companies offer pay-per-mile coverage?
3. What are the privacy concerns with insurance companies’ vehicle tracking tools?
4. What misconceptions do you think people have about pay-per-mile insurance?
WalletHub experts are widely quoted. Contact our media team to schedule an interview.