Should you switch to pay-per-mile insurance?

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Many people do not drive as much as the average person, and that number has expanded. If the pandemic has minimized your commute or the amount you are driving to social obligations, or you work remotely or close to home, you may start to wonder why you are paying to insure a car that spends a lot of time in park. That makes pay-per-mile insurance a potential way to save money.

If you are curious if pay-as-you-go car insurance can help you lower your premiums, it may help to consider some of the best car insurance companies for pay-per-mile car insurance and how this insurance option works.

What is pay-per-mile insurance?

This type of coverage is just what it sounds like. With it, your car insurance rates are primarily set by how many miles you cover. Insurance by the mile can give you greater control over the cost of your coverage, helping people like high-risk drivers manage their car insurance budget.

Usually, pay-per-mile car insurance costs get broken into two categories:

  • Your base rate: This is the flat amount you’re going to pay (usually, each day or month). Insurers use the same factors to set this rate as they do with any other car insurance policy. That means things like your age, your driving history and your vehicle come into play.
  • Your pay-per-mile rate: On top of your base rate, you pay by the mile. The charge per mile is usually small, but it can add up quickly if you drive a lot in any given month. But if you don’t drive much, the cost of pay-as-you-go car insurance may rival even the cheapest traditional car insurance policies.

Generally, with pay-per-mile insurance, insurance companies equip your car with a device so they can track how much you are driving and bill you accordingly.

How is pay-per-mile different from telematics insurance?

While telematics and car insurance by the mile both use a device in your vehicle to track your driving, they have different goals. With insurance by the mile, your insurance provider is looking at how much you drive. With telematics, they look at how you drive.

Telematics insurance offers safe driving discounts to people who use best practices out on the road (think: not speeding or braking gradually). If you are a safe driver and you are looking to find cheaper car insurance, see if your insurer offers a telematics program and if you would meet discount eligibility.

Which providers offer pay-per-mile insurance policies?

Pay-per-mile car insurance is a relatively new concept, although it’s picking up steam. As people drive less now that many are living that WFH life, more insurers are likely to offer car insurance by the mile.

For now, though, here are some of your options. All the base rate and per-mile rate examples, along with the estimated savings, come straight from the insurance providers.

Program and Provider How it works Availability Estimated savings
Metromile Metromile’s plug-in device is called the Pulse. You pay Metromile a base monthly rate (e.g., $29) plug a per-mile rate (e.g. $.06). If you drive 250 miles in a day, any miles beyond that are free. AZ, CA, IL, NJ, OR, PA, VA, WA 47%, on average
Mile Auto You send Mile a picture of your odometer once a month. Then, you pay your base rate (e.g., $48) plus your per-mile rate ($.08). AZ, GA, IL, OR 30-40%, on average
Milewise® from Allstate Milewise uses a plug-in device and the Allstate app. With this program, Allstate sets a base daily rate for you (e.g., $1.50), then adds that to your per-mile rate (e.g., $.06) to arrive at your coverage cost. AZ, DE, FL, ID, IL, IN, MA, MD, NJ, OH, OR, PA,TX, VA, WA, WV Not disclosed by the provider
SmartMiles® from Nationwide SmartMiles sets a monthly base rate (e.g., $35) plus a per-mile rate (e.g., $.07), which Nationwide tracks using a small device. Like Metromile, SmartMiles waives all miles over 250 in any given day. AR, AZ, CO, CT, DC, FL, GA, IA, ID, IL, IN, KS, KY, MD, ME, MI, MN, MO, MS, MT, ND, NE, NH, NM, NV, OH, OR, PA, RI, SC, SD, TN, TX, UT, VA, VT, WA, WI, WV, WY As an example, Nationwide says someone who might pay $133 a month with traditional coverage from them could pay $95 with SmartMiles.
Root Insurance Although technically not pay-per-mile insurance, Root works similarly. It uses your phone to track your driving, including miles and behavior and sets your premium accordingly. AL*, AK*, AZ, AR, CA, CO, CT, DE, FL, GA, HI*, IL, IN, IA, KY, LA, MD, MS, MO, MT, NE, NV, NH*, NM, NC*, ND, OH, OK, OR, PA, SC, TN, TX, UT, VA, WA*, WV
*Coming soon
Up to $900 a year

Who is pay-per-mile insurance best for?

As a general rule of thumb, you might want to consider car insurance by the mile if you drive less than average. Here are a few key groups that might save with pay-as-you-go car insurance.

People who work from home

If you are a remote worker, you are probably not covering nearly as many miles as the average commuter, which means you might save with insurance by the mile.

Just keep in mind that if you switch your coverage and then have to go back into the office, you could end up paying more with pay-per-mile insurance.

People who have another primary mode of transportation

Maybe you own a car, but you primarily use a bike or public transport to get around. You may be able to save a good chunk of change by switching to pay-as-you-go car insurance since your car probably isn’t getting used much anyway.


Can you lie about how much you drive with pay-per-mile insurance?

No. The vast majority of pay-per-mile car insurance providers will only offer you coverage if you plug a device into your car. That device tracks your mileage and reports that data back to your insurance provider.

Is it worth switching to a pay-per-mile insurance plan?

If you do not drive much, it is worth at least exploring what your base and per-mile rates would be. Get a quote to see if you would save a solid chunk of change. If you would, you can use our guide to switching carriers to help you navigate the process.

Do I need to drive with my phone with car insurance by the mile?

Not necessarily. Most insurers will give you a plug-in device that stays in your car to track your mileage, but Mile Auto just asks you to send in a picture of your odometer once a month.

Written by
Kacie Goff
Personal Finance Contributor
Kacie Goff is a personal finance and insurance writer with over seven years of experience covering personal and commercial coverage options. She writes for Bankrate, The Simple Dollar, NextAdvisor, Varo Money, Coverage, Best Credit Cards and more. She's covered a broad range of policy types — including less-talked-about coverages like wrap insurance and E&O — and she specializes in auto, homeowners and life insurance.