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: December 18, 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 structure covers standard insurance costs while charging extra only for miles you drive.

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. Here's how it works: 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 premium 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:

Plug-in devices: Small trackers 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: GPS-enabled smartphone apps 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: 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.

Billing Cycle Process

Most 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 premium.

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.

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.

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.

Who Offers Pay-Per-Mile Car Insurance

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.

Situation	Description
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

Enrolling in pay-per-mile insurance takes 15-30 minutes online. Here's how to switch and set up mileage tracking for accurate billing.

1
Verify eligibility and gather documents
Check your annual mileage to confirm pay-per-mile insurance saves you money. This coverage works best for drivers logging fewer than 10,000 miles yearly, though limits vary by insurer.

Collect your current insurance policy, driver's license and vehicle details (VIN, make, model, year) before applying. Verify your phone compatibility with your insurer's app and note your current odometer reading, which establishes your mileage baseline.
2
Get a quote and apply
Visit your chosen insurer's website and enter your ZIP code, vehicle information and driving history. You'll answer questions about your typical driving patterns—commute distance, weekend trips, road trip frequency. These responses help set your base rate and mileage charges.
3
Choose your tracking method
After approval, select how you'll track miles:
- Mobile app: Uses GPS to record trips automatically through your smartphone.
- Plug-in device: Connects to your car's diagnostic port and tracks mileage without manual input.
- Odometer photos: Upload monthly odometer photos through the app or website. This requires consistent reporting but avoids automated tracking.
4
Monitor your first billing cycle
Your first bill covers a partial month while your tracking system calibrates. Expect a 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. Most insurers display real-time driving data and monthly spending projections.
5
Set budget alerts and track savings
Configure mileage alerts through your insurer's app to prevent surprise bills. Many companies offer warnings at 80% and 90% of your monthly budget, giving you time to adjust driving habits.

Compare your pay-per-mile bills against your previous standard premiums to measure savings. Budget for seasonal variations—summer vacation months run higher, while winter typically brings lower costs.

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.

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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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