Pay-Per-Mile Car Insurance

Pay-per-mile insurance adjusts premiums based on how much you drive. Nationwide is the best insurer, with safe driving discounts and a 250-mile daily cap.

Find out if you're overpaying for car insurance below.

Written by Mark Fitzpatrick

Updated: November 5, 2025

Advertising & Editorial Disclosure

Key Takeaways

Pay-per-mile insurance is ideal for low-mileage drivers. Insurers base your total premium on the miles you've driven, making it a cost-effective option for low-mileage drivers.

Eligibility requirements for low-mileage drivers vary by insurer. In most cases, you'd need to log fewer than 10,000 miles annually.

Metromile specializes in pay-per-mile coverage, but major insurers like Nationwide, Allstate and Liberty Mutual are expanding their offerings. Program availability depends on the state.

What Is Pay-Per-Mile Car Insurance?

Pay-per-mile car insurance is usage-based coverage that charges drivers based on actual miles driven rather than estimated annual mileage. This mileage-based car insurance combines a monthly base rate with a per-mile fee, creating variable premiums that adjust based on your driving patterns.

It provides the same coverage options as traditional policies, including liability, comprehensive and collision insurance. The only difference is how your premium is calculated and billed, making it ideal for drivers who want full financial protection without paying for unused coverage.

How Does Pay-Per-Mile Car Insurance Work?

Your monthly premium combines a fixed base rate with variable mileage charges calculated from your actual driving distance. This dual-rate structure covers basic insurance while charging additional costs only for the miles you drive.How Does Pay-Per-Mile Car Insurance Work?vs

Base Rate Plus Per-Mile Calculation

Your base rate covers standard insurance factors like your age, vehicle type, location and driving history. This fixed monthly amount depends on your risk profile and coverage selections.

The per-mile rate falls between two and 10 cents per mile, varying by insurer and your specific circumstances. With a $60 base rate and $0.10 per mile, driving 1,200 miles monthly costs $180. If you drive 400 miles the next month, your premium drops to $100. This calculation happens each billing cycle based on your tracked mileage data.

Mileage Tracking Methods

Insurance companies use three primary tracking methods to monitor your driving distance.

Plug-in devices connect to your vehicle's OBD-II diagnostic port (a standard connector in cars made after 1996), collecting mileage data and transmitting it to your insurer without requiring any action from you. These small devices don't affect your vehicle's performance or battery life.
Mobile apps track your driving using GPS technology, running in the background on your smartphone to calculate distances traveled. Most apps start tracking when you begin driving and stop when you park, providing detailed trip logs and mileage summaries.
Odometer photo submission requires you to upload monthly photos of your odometer reading through your insurer's app or website. This low-tech option works well for drivers who prefer minimal technology but requires consistent monthly reporting for accurate billing and to avoid estimation charges.

Billing Cycle Process

Most pay-per-mile insurers bill monthly based on your previous month's driving data. Your tracking device or app sends mileage information to your insurer throughout the month, with final calculations completed after your billing cycle ends. You'll receive a detailed breakdown showing your base rate, total miles driven, per-mile charges and final premium amount.

Some insurers offer daily mileage caps, often 250 miles, meaning you won't pay for additional miles beyond that limit on any single day. This feature prevents unexpectedly high bills during road trips or unusually long driving days and maintains affordable coverage for occasional extended travel.arges a fixed premium regardless of actual driving. With pay-per-mile cov

Pay-Per-Mile Insurance vs. Traditional Car Insurance

Traditional car insurance estimates your annual mileage during the quote process and charges a fixed premium regardless of actual driving. With pay-per-mile coverage, your premium fluctuates monthly based on real driving data. If you drive fewer miles in a month, you pay less.

Category	Traditional Car Insurance	Pay-Per-Mile Car Insurance
Pricing Structure	Uses estimated annual mileage and charges a fixed premium regardless of actual miles driven.	Adjusts monthly based on actual miles driven.
Cost Variability	Premiums remain constant whether you drive 500 or 2,000 miles monthly.	Monthly premiums fluctuate based on usage.
Tracking Requirements	Doesn't monitor driving habits or mileage.	Requires continuous mileage tracking through apps or devices.
Target Clients	Works for all drivers.	Benefits low-mileage drivers (under 10,000 miles yearly).

Pay-Per-Mile Car Insurance vs. Behavior-Based Car Insurance

Pay-per-mile and behavior-based car insurance adjust premiums based on usage but focus on different factors. Pay-per-mile insurance calculates costs based on miles driven, making it ideal for low-mileage drivers.

Behavior-based insurance adjusts rates based on driving safety, rewarding responsible habits and raising rates for risky behaviors. It tracks driving behaviors such as:

Hard braking or fast acceleration
Phone use while driving
Sharp turns
Driving on weekends or at night
Driving in bad weather
Speeding
Maintaining good driving habits

SAFE DRIVING PAYS: BEHAVIOR-BASED INSURANCE EXPLAINED

Behavior-based insurance plans reward safe driving habits, such as smooth driving, with lower premiums. Unsafe behaviors lead to higher rates.

How Much Is Pay-Per-Mile Car Insurance?

Pay-per-mile car insurance costs average $65 to $149 per month for comparable coverage. The total cost depends on your base rate, per-mile charge and the number of miles you drive. Base rate factors, per-mile charges, monthly mileage and coverage selection influence your costs.

Pay-Per-Mile Car Insurance Rates

The table below compares estimated monthly rates from various insurers, showing how costs vary based on mileage and provider:

Insurer	Monthly Rate
Metromile (26 miles per week)	$65
GEICO	$66
Mercury	$72
Country Financial	$72
USAA	$73
State Farm	$79
Metromile (65 miles per week)	$80
Erie	$84
Progressive	$85
American Family	$90
Travelers	$94
Allstate	$98
Metromile (130 miles per week)	$103
Farmers	$111
MetLife	$116
Nationwide	$123
AAA	$139
Metromile (260 miles per week)	$149

*Note: MoneyGeek's sample quote from Metromile in Illinois includes a base rate of $56 and $0.08 per mile, totaling $65 per month for low-mileage drivers. This is slightly lower than GEICO's $66 and much less than AAA's $139 for similar coverage.

Pay-Per-Mile Car Insurance Companies

Pay-per-mile insurance is a good choice for low-mileage drivers, but it isn't widely available. Only a few major car insurance providers offer these programs in select states.

Pay-per-mile insurance helps low-mileage drivers save money. Compare coverage, customer service and claims processes before selecting a policy. Top providers include Metromile, Nationwide, Liberty Mutual and Allstate.

Best Pay-Per-Mile InsuranceNationwide

Overview

Nationwide is the top choice for pay-per-mile car insurance. Available in 40 states, it's the most widely accessible option. Its SmartMiles program charges a base monthly rate and a per-mile rate. Nationwide provides an exception for road trips.

Only the first 250 miles driven in a day count toward your premium. Drivers save up to 10% more with a safe driving discount.

Available in 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 and WY

Allstate

Overview

Allstate's Milewise program charges a daily rate plus a per-mile fee, letting drivers pay based on usage. Available in 16 states and Washington, D.C., it's more accessible than some competitors. It doesn't offer discounts, so savings depend solely on driving habits.

Available in AZ, DE, FL, ID, IL, IN, MA, MD, NJ, OH, OR, PA, TX, VA, WA, WV and DC

Metromile Auto

Overview

Metromile's pay-per-mile insurance charges a monthly base rate plus a per-mile fee, making it ideal for low-mileage drivers. It uses a tracking device to monitor mileage but doesn't offer discounts, so savings depend on how little you drive.

As a pioneer in the pay-per-mile space, Metromile offers specialized expertise and technology designed specifically for usage-based insurance.

Available in AZ, CA, IL, NJ, OR, PA, VA and WA

Liberty Mutual

Overview

Liberty Mutual's ByMile program tracks mileage and bills drivers based on miles driven in the previous month plus a base rate. Its 150-mile daily cap prevents excessive charges for long trips.

Availability is limited to select states, and the program doesn't offer discounts.

Should You Get Pay-Per-Mile Car Insurance?

Pay-per-mile insurance works well for low-mileage drivers, including remote workers, retirees and those who use their cars occasionally. If you drive less than 10,000 miles annually, it costs less than a traditional policy.

Based on Metromile's pricing, drivers traveling fewer than 26 miles weekly see the biggest savings. A standard policy is more affordable if you drive often.

Who Qualifies for Pay-Per-Mile Car Insurance?

Pay-per-mile insurance isn't available to every driver or in every location. Understanding eligibility requirements helps you determine if this coverage option fits your situation.

Basic Qualification Requirements

Most pay-per-mile insurers require drivers to be at least 18 years old with a valid driver's license and a clean driving record. You'll need a smartphone compatible with tracking apps or a vehicle equipped with an OBD-II port for plug-in devices. Your car must be model year 1996 or newer to accommodate the required mileage tracking technology.

Insurance companies review your driving history for the past three to five years, looking for major violations like DUI convictions, reckless driving charges or multiple at-fault accidents. A history of frequent claims or policy cancellations disqualifies you from pay-per-mile programs.

State Availability and Restrictions

Pay-per-mile insurance isn't available in every state. Programs commonly exclude Alaska, Hawaii, Louisiana, New York, North Carolina and Oklahoma due to state-specific insurance regulations. Availability changes based on regulatory approval, so check with providers for current offerings.

Some states impose restrictions on mileage tracking or data use. California doesn't allow insurers to use telematics data for ratings; companies use odometer readings instead. Other states require clear privacy disclosures or limit data collection practices.

Credit Score and Financial Factors

Credit-based insurance scores influence your rates, but poor credit doesn't disqualify you. Insurers assess your financial history, including payment reliability and past insurance behavior, to evaluate pricing and risk.

Pay-per-mile programs require month-to-month billing based on miles driven, so insurers review your payment consistency and ability to maintain continuous coverage.

Pay-Per-Mile Insurance for Special Situations

Pay-per-mile insurance works for more than daily commuters. Here's how this coverage handles road trips, seasonal driving changes and other scenarios affecting your monthly bill.

Road Trips and Daily Mileage Caps: Most insurers cap daily charges at 250 miles. On a 500-mile road trip, you pay for only the first 250 miles that day, making long-distance travel affordable.
Seasonal Driving Variations: Snowbirds benefit from pay-per-mile insurance because their driving patterns change throughout the year. Drive 1,000 miles monthly during summer but only 200 miles during winter? You'll save during low-driving periods without changing your policy.
Multiple Vehicle Scenarios: Families with multiple vehicles find pay-per-mile insurance works well for their least-used car. You have a primary commuter vehicle and a weekend car that sits unused most days? Switching the weekend car to pay-per-mile coverage cuts your overall insurance costs.

BUSINESS VS. PERSONAL USE DISTINCTIONS

Pay-per-mile insurance covers personal use only. Check your policy terms if you use your vehicle for business purposes. Many insurers allow occasional business use, like driving to the office or work meetings. Regular commercial activity requires separate coverage.

How to Sign Up for Pay-Per-Mile Insurance

The enrollment process for pay-per-mile insurance takes about 15 to 30 minutes online. Here's what to expect when making the switch and how to set up mileage tracking for accurate billing.

1
Check your eligibility and gather documents
Check your yearly mileage to see if pay-per-mile insurance will help you save. It usually works best for drivers who travel fewer than 10,000 miles a year, though this limit varies by company.

Before applying, gather your current insurance details, driver’s license and vehicle information, including the VIN, make, model and year.

Most insurers ask you to download their mobile app, so confirm your phone is compatible. You’ll also verify your car’s odometer reading, which serves as the starting point for mileage tracking.
2
Get a personalized quote and apply
Go to your chosen insurer’s website and enter basic details, including your ZIP code, vehicle information and driving history. The process is similar to getting a standard car insurance quote.
You’ll also be asked about your usual driving habits, from weekend driving to regular road trips. Your responses help the insurer set an accurate base rate and mileage allowance.
3
Set up mileage tracking
Once you’re approved, you’ll choose how to track your miles. Insurers usually offer three options:
- Mobile app tracking: Uses your phone’s GPS to record trips automatically.
- Plug-in device: Connects to your car’s diagnostic port and tracks data without input.
- Odometer photo uploads: You send in monthly photos of your odometer through the app or website. This low-tech option works well if you prefer less automation but requires consistent reporting.
4
Complete your first billing cycle
Your first bill often covers a partial month while your tracking system calibrates. It might look higher at first since the company estimates mileage for the first few days until data collection begins.

Use the app or online portal to keep an eye on your mileage and costs. Many insurers show real-time driving data and monthly spending estimates to help you stay on budget.
5
Set up cost monitoring and budget controls
Set mileage alerts through your insurer's app to avoid surprise bills. Many companies let you set warnings at 80% and 90% of your monthly budget, giving you time to reduce driving.

Keep track of your monthly savings. Compare your pay-per-mile bills and your previous standard car insurance premiums. Seasonal variations in driving affect your bills, so budget for higher expenses during summer vacation and lower costs during winter months or when you drive less frequently.

Pay-Per-Mile Auto Insurance: Bottom Line

Pay-per-mile insurance adjusts costs based on mileage, making it a good option for low-mileage drivers. Maximize benefits through accurate self-assessment of your driving habits. Compare available providers and offers.

Pay-Per-Mile Insurance: FAQ

We answer common questions about pay-per-mile auto insurance.

When is pay-per-mile car insurance worth it?

Pay-per-mile insurance is cost-effective for infrequent drivers or those who log mileage less than 10,000 miles annually.

How do pay-per-mile car insurance calculations work?

Insurance companies determine pay-per-mile costs using a base rate and a per-mile charge. Similar to standard policies, rates depend on your location, age and driving history.

What is the best pay-per-mile insurance plan?

Nationwide is a top choice for pay-per-mile insurance. Its SmartMiles program is available in 40 states, making it the most widely accessible option evaluated by MoneyGeek. SmartMiles also tracks driving habits, offering additional savings to safe drivers.

How do I set up pay-per-mile insurance?

You can set up pay-per-mile insurance online in about 15 to 30 minutes. Keep your current policy details, driver’s license and vehicle information on hand.

After you’re approved, choose how you want to track your mileage using a mobile app, plug-in device or monthly odometer photos. Most insurers will ask you to install their app and turn on location services so tracking happens automatically.

What are the privacy concerns with mileage tracking?

Pay-per-mile insurance uses GPS or plug-in devices to collect driving data, such as your location and mileage. Most insurers use this information only to calculate your bill and don’t share it with third parties.

Always review the company’s privacy policy to see how your data is handled. If you’d rather limit tracking, choose the option that lets you submit monthly odometer photos instead.

How do daily limits work for road trips?

Most pay-per-mile insurers cap daily charges at 250 miles, so you won't pay for every mile on long road trips. If you drive 400 miles in one day, you'll only pay for 250 miles. This daily cap prevents unexpectedly high bills during vacation travel and maintains affordable coverage for occasional extended trips.

Can I use pay-per-mile insurance for business driving?

Pay-per-mile insurance covers personal use only. Most insurers allow incidental business use, like driving to the office or occasional work meetings, but regular commercial activity requires separate coverage. Check your policy terms if you use your vehicle for rideshare services, deliveries or frequent business travel.

Best Pay-Per-Mile Car Insurance: Our Review Methodology

Pay-per-mile insurance's biggest challenge is knowing if the per-mile rate actually saves you money compared to traditional insurance, since a low base rate with high per-mile charges can cost more than expected.

We gathered 83,056 quotes from 46 insurers across 473 ZIP codes to understand how pay-per-mile pricing works across different coverage levels and for drivers with various risk profiles.

Our driver profile represented: a 40-year-old man driving a Toyota Camry LE with a clean driving record, logging 12,000 miles driven annually.

Why this profile matters for pay-per-mile shoppers: At 12,000 annual miles, you're right at the threshold where pay-per-mile starts losing its advantage. Most providers recommend this insurance for drivers under 10,000 miles yearly. Testing at this mileage level shows whether pay-per-mile genuinely saves money or just shifts costs between base rates and per-mile charges.

Coverage levels tested: National comparisons used 100/300/100 coverage ($100,000 bodily injury per person, $300,000 per accident, $100,000 property damage). State-by-state analysis used 50/100/50 coverage to match typical state requirements. Both scenarios included a $1,000 deductible.

Why this approach matters: Pay-per-mile insurance isn't just about low mileage—it's about finding the right balance of coverage and cost. A $1,000 deductible means you pay that amount before insurance covers the rest of a claim. With a $2,000 fender-bender, you pay $1,000, and insurance covers the remaining $1,000.

Data sources included: State insurance departments for regulatory compliance, Quadrant Information Services for rate accuracy, and customer service testing for real-world usability.

This approach ensures our recommendations reflect what you'll pay when you get quotes, not just theoretical savings. We focused on companies that make pay-per-mile insurance accessible to everyday drivers.

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About Mark Fitzpatrick

Mark Fitzpatrick, a Licensed Property and Casualty Insurance Producer, is MoneyGeek's resident Personal Finance Expert. With over five years of experience analyzing the insurance market, he conducts original research and creates tailored content for all types of buyers. His insights have been featured in publications like CNBC, NBC News and Mashable.

Fitzpatrick holds a master’s degree in economics and international relations from Johns Hopkins University and a bachelor’s degree from Boston College. He's also a five-time Jeopardy champion!

He writes about economics and insurance, breaking down complex topics so people know what they're buying.

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