Pay-per-mile car insurance is usage-based coverage that charges you based on actual miles driven rather than estimated annual mileage. Instead of paying a flat monthly premium regardless of how much you drive, you pay a fixed base rate plus a variable per-mile fee. This structure makes it ideal for drivers who want full financial protection without paying for unused coverage. It provides the same coverage options as traditional policies, including liability, comprehensive and collision insurance.
Pay-Per-Mile Car Insurance: Best Options & How it Works
Updated: January 21, 2026
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Key Takeaways
Pay-per-mile insurance is ideal for low-mileage drivers who have fewer than 10,000 miles annually and can save 20-40% compared to traditional policies.
Nationwide SmartMiles is the best pay-per-mile program, available in 40 states with a 250-mile daily cap and safe driving discounts up to 10%. Metromile specializes in pay-per-mile coverage and has the best tracking and convenience but is more expensive.
You'll pay a monthly base rate plus a per-mile charge ($0.02-$0.10 per mile), making your insurance cost fluctuate based on actual driving.
What Is Pay-Per-Mile Car Insurance?
How Does Pay-Per-Mile Car Insurance Work?
Pay-per-mile pricing, mileage tracking and monthly billing work together to create your monthly insurance cost. Here's how it works:
- Plug-in devices: These connect to your vehicle's OBD-II diagnostic port (standard in cars made after 1996) and transmit mileage data automatically. These devices don't affect vehicle performance or drain your battery.
- Mobile apps: This allows GPS to track driving distances in the background, starting when you begin driving and stopping when you park. You'll get detailed trip logs and mileage summaries without manual input.
- Odometer photos: You can upload monthly photos of your odometer reading through your insurer's app or website. This low-tech option requires consistent monthly reporting to avoid estimation charges.
Base Rate Plus Per-Mile Calculation
Your base rate covers standard insurance factors like age, vehicle type, location and driving history. This fixed monthly amount stays consistent regardless of how much you drive.
The per-mile rate runs between two and 10 cents per mile, varying by insurer and your risk profile. With a $60 base rate and $0.10 per mile, driving 1,200 miles costs $180 total. Drive only 400 miles the next month, and your cost drops to $100. Your insurer recalculates costs each billing cycle based on tracked mileage.
Mileage Tracking Methods
Insurers use three methods to monitor your driving distance:
Billing Cycle Process
Pay-per-mile insurers bill monthly based on the previous month's driving data. Your tracking device or app sends mileage information throughout the month, with final calculations completed after your billing cycle ends. You'll receive a breakdown showing your base rate, total miles driven, per-mile charges and final monthly cost.
Many insurers cap daily mileage at 250 miles, so you won't pay for additional miles beyond that limit on any single day. This prevents unexpectedly high bills during road trips or unusually long drives.
How Much Does Pay-Per-Mile Car Insurance Cost?
Pay-per-mile car insurance costs range from $58 to $150 per month. Your monthly bill combines a fixed base rate ($30-$60) with a per-mile charge (averaging $0.06-$0.07 per mile). The less you drive, the more you save.
Pay-Per-Mile Cost by Company & Mileage
26 miles | $58 | $65 | $72 | $68 |
65 miles | $70 | $80 | $94 | $82 |
130 miles | $93 | $103 | $135 | $109 |
260 miles | $149 | $149 | $194 | $155 |
*Note: The table above shows estimated monthly costs based on published rate examples from each provider. Estimates assume a 35-year-old driver with a clean record, 2020 Honda Civic, 100/300/100 liability with $500 deductibles, average across states.
Best Pay-Per-Mile Insurance Companies
Only a few major car insurance providers offer these programs in select states. We compared coverage, customer service and claims processes to find the best pay-per-mile companies. Nationwide was ranked best with Metromile and Allstate being a good choice for certain driving profile.
Best Pay-Per-Mile InsuranceNationwide
Overview
We'd pick Nationwide as the top choice for pay-per-mile coverage. It's available in 40 states, making it the most widely accessible option we've found. The SmartMiles program charges a base monthly rate plus a per-mile fee, and here's what sets it apart: Nationwide caps your daily charges at 250 miles, so a road trip doesn't blow your budget. You also get safe driving discounts up to 10%, rewarding you for good habits beyond just driving less.
The pricing structure is straightforward. You pay your base rate (which varies by your profile) plus roughly $0.05 to $0.12 per mile depending on your risk factors.
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
Best for Usage TrackingMetromile Auto
Overview
Metromile belongs on this list because it pioneered pay-per-mile insurance and built their entire business around it. They specialize in this coverage type with technology designed specifically for usage-based insurance. If precision tracking and expertise in this niche matter to you, Metromile is the best choice.
The company charges a monthly base rate plus a per-mile fee, averaging $0.08 to $0.14 per mile depending on your location and profile. They use a plug-in device to monitor mileage with accuracy, though you don't get the same discount opportunities as Nationwide. Your savings depend entirely on driving less, not on bundling or safe driving behaviors.
The trade-off is availability. Metromile operates in only eight states (Arizona, California, Illinois, New Jersey, Oregon, Pennsylvania, Virginia and Washington), so it won't work for everyone.
Available in: AZ, CA, IL, NJ, OR, PA, VA and WA
Honorable MentionAllstate
Overview
Allstate's Milewise program deserves consideration because it offers daily billing, which some drivers prefer over monthly charges. You pay a daily rate (roughly $0.50 to $1.00 per day) plus a per-mile fee, letting you pay for the days your car is actually driven. It's available in 17 states and Washington, D.C., giving you more access than Metromile but less than Nationwide.
The downside: Allstate doesn't offer discounts, so your savings depend entirely on how little you drive. You won't get rewards for safe driving or bundling discounts. If that matters to you, Nationwide is the better choice.
Available in: AZ, DE, FL, ID, IL, IN, MA, MD, NJ, OH, OR, PA, TX, VA, WA, WV and DC
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.
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.
Does your driving pattern match the math? If you're consistently putting 200-400 miles on your car monthly, pay-per-mile makes sense. If you're averaging 1,500+ miles monthly, traditional insurance is almost certainly cheaper.
Requirements and Who Qualifies for Pay-Per-Mile Car Insurance?
Basic Qualification Requirements
Pay-per-mile insurers require you to be at least 18 years old with a valid driver's license and a relatively clean driving record. You'll need a smartphone compatible with tracking apps or a vehicle equipped with an OBD-II port (standard in cars made after 1996).
State Availability and Restrictions
Pay-per-mile programs aren't available in every state. Alaska, Hawaii, Louisiana, New York, North Carolina and Oklahoma exclude them due to state-specific insurance regulations. California allows pay-per-mile coverage but requires odometer readings instead of telematics data for rating purposes.
Credit Score and Financial Factors
Credit-based insurance scores influence your rates, but poor credit alone won't disqualify you. Insurers assess your payment reliability and past insurance behavior to evaluate pricing.
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
Enrolling in pay-per-mile insurance takes 15-30 minutes online. Here's how to switch and set up mileage tracking for accurate billing.
- 1Verify eligibility and gather documents
Check your annual mileage to confirm pay-per-mile insurance saves you money. Collect your current insurance policy, driver's license and vehicle details (VIN, make, model, year). Verify your phone compatibility with your insurer's app and note your current odometer reading to establish your mileage baseline.
- 2Get a pay-per-mile quote and apply
Visit your insurer's website and enter your ZIP code, vehicle information and driving history. You'll answer questions about driving patterns like commute distance, weekend trips, road trip frequency. These responses help set your base rate and mileage charges.
- 3Choose your tracking method
Mobile apps use GPS to record trips automatically through your smartphone. Plug-in devices connect to your car's diagnostic port and track mileage without manual input. Odometer photos let you upload monthly readings through the app or website (requires consistent monthly reporting).
- 4Monitor your first billing cycle
Your first bill covers a partial month while your tracking system calibrates. Expect a slightly higher initial charge since insurers estimate mileage for the first few days until data collection starts. Check your app or online portal to track mileage and costs.
Pay-Per-Mile Insurance: FAQ
We answer common questions about pay-per-mile auto insurance.
How do pay-per-mile daily limits work for road trips?
Most pay-per-mile insurers cap daily charges at 250 miles (150 miles for Liberty Mutual), 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 the capped amount. This prevents unexpectedly high bills during vacation travel.
What happens if I drive more than expected in a month with pay-per-mile?
Your cost adjusts based on actual miles driven, so if you drive more than anticipated, your bill will be higher that month
What if I don't drive one month?
You'll still pay your base rate even if you don't drive at all. The base rate covers your policy and protection. You won't pay any per-mile charges if you log zero miles, so your bill drops.
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.
Pay-as-You-Go Car Insurance: Related Articles
About Mark Fitzpatrick
Mark Fitzpatrick, a Licensed Property and Casualty Insurance Producer, is MoneyGeek's resident Personal Finance Expert. He has analyzed the insurance market for over five years, conducting original research for insurance shoppers. His insights have been featured in 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.