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What is Pay-Per-Mile Car Insurance?

Do you only drive your car occasionally? Learn how pay-per-mile car insurance may help you save on auto insurance.


Pay-per-mile car insurance is an alternative for drivers who don't want to pay for a full insurance policy when they drive less than the average 13,000 miles per year. Paying for insurance by the mile may be a good option for those who regularly use public transportation, are retired, work from home or simply don't drive often.

There are currently four main insurers that offer pay-per-mile car insurance: Metromile, Milewise (through Allstate), Esurance and SmartMiles (through Nationwide). There are also plenty of companies that offer low-mileage discounts. Find out more about car insurance by the mile in this article, including:

How to get car insurance by the mile

If you drive less than the average 13,000 miles per year, you may consider switching to a policy that allows you to pay for insurance by the mile. This could save you hundreds of dollars annually, but only if you don't drive often. If you use your car to commute regularly, for example, you may want to purchase a standard policy because paying for every mile you drive may add up to be more expensive than a regular policy.

To get insurance by the mile, you should first decide whether you would save money tracking your miles. Then, find out which company offers pay-per-mile insurance in your state, as access to insurance by the mile is limited depending on where you live. After you decide from which company you want to purchase a pay-per-mile policy (there are only a few options), you'll have a device installed in your car that will track how many miles you drive.

When you drive, those miles are multiplied by your per-mile rate and added to your base rate. If you don't drive often, you could save a lot on car insurance. However, if you drive more miles than what you originally thought, it may add up to more than a standard policy.

Companies that offer pay-as-you-go auto insurance

There are only a few companies that offer a true form of pay-per-mile car insurance. These insurers offer policies that are based on how many miles the in-car device tracks your driving. They also consider similar factors to standard insurers to calculate your base rate, like driving history and age.


Metromile offers low base rates starting at $29 monthly, and your final premium cost is based on how far you drive on top of that. For example, if your base rate is $29 and you drive 450 miles at 6 cents per mile, you'll pay $56 that month. Metromile tracks the miles you drive through a device that is plugged into a port in your dashboard.

According to Metromile, these are the average annual savings by mileage:

  • $947 saved for 2,500 miles
  • $741 saved for 5,000 miles
  • $541 saved for 10,000 miles

Also, all the miles you drive over 250 a day are free (or over 150 miles a day in New Jersey, so long trips shouldn’t be something to stress over. Coverage options through Metromile include collision and comprehensive, bodily injury and property damage, under/uninsured motorist, medical payments, rental reimbursement and 24/7 roadside assistance.


With Milewise from Allstate, you'll pay a daily base rate and a per-mile rate, equaling the total cost you pay per day. So the less you drive, the lower your rates will be. According to Allstate, if you only drive 19 miles per week with Milewise, you may see around 39% savings compared to a regular car insurance policy. If you drive around 135 miles per week, you may see around 10% in savings.

According to Allstate, you could pay less than $3 a day, depending on how much you drive. Allstate's sample rates outline a $1.50 daily rate, plus 6 cents per mile. So if you drive 12 miles that day, you'll pay $2.22 for the day.

Milewise is currently available in Washington, Oregon, Idaho, Arizona, Texas, Virginia, Maryland, Delaware, New Jersey, West Virginia, Ohio, Indiana and Illinois.

Esurance Pay Per Mile

Only available in Oregon, Esurance Pay Per Mile is a mileage-based policy aimed at drivers who opt for other transportation methods on a daily basis, but still need to insure their vehicle.

The policy offers the same coverage options as an unlimited mileage insurance policy, but offers savings the less you drive. Similar to Metromile, distance is tracked through a device that plugs into the OBD-II port in your dashboard. You'll only be charged for up to 150 miles per day, and if you don't drive at all, you just pay the base fee.


SmartMiles is a pay-per-mile program through Nationwide. The policy offers the same coverage options as a traditional Nationwide insurance policy. Like other pay-per-mile policies, your monthly rates depend on how many miles you drive, so you could pay less compared to a traditional plan.

Your payment consists of a base rate and a variable rate, which is the cost per mile and will cause your premiums to vary month-to-month. According to an example from Nationwide, a traditional policy with unlimited mileage may cost $115 per month. However, a SmartMiles policy could have a $48 base rate, plus a $.06 charge per mile. So, if you drive 500 miles in a month, you'll pay $78. That's $37 in savings for the month.

SmartMiles offers roadtrip exception, so you won't have to pay for more than 250 miles in a day. It uses a small device in your car to track miles, which you can stay updated on via online access.

Low-mileage discounts

The main difference between pay-per-mile insurance and low-mileage insurance discounts is that rates for pay-per-mile insurance are mainly calculated by how many miles you drive. With low-mileage discounts, you purchase a traditional auto insurance policy and have the option to earn a discount for driving less. While there are only a few companies that offer true pay-per-mile policies (and only in some states), there are several options for low-mileage discounts.

If you already hold a policy with an insurer and don't want to fully commit to a pay-per-mile policy, check out low-mileage discounts. Low-mileage discounts are a great option for drivers who have safe driving practices and don't drive much. Keep in mind that many usage-based discounts can also increase your rates if your insurer detects bad driving habits like hard braking or late-night cruises.

Several major insurers offer low-mileage discounts, including Snapshot from Progressive, SmartRide from Nationwide and Drivewise from Allstate. LLC has made every effort to ensure that the information on this site is correct, but we cannot guarantee that it is free of inaccuracies, errors, or omissions. All content and services provided on or through this site are provided "as is" and "as available" for use. LLC makes no representations or warranties of any kind, express or implied, as to the operation of this site or to the information, content, materials, or products included on this site. You expressly agree that your use of this site is at your sole risk.