A to Z Insurances

Pay Per Mile car Insurance

 With No Deposit/No Down Payment.

What is pay-per-mile car insurance?

Last Updated on November 18, 2023 by a2z_admin


Pay-per-mile car insurance is a type of auto insurance policy where the cost is determined by the number of miles you drive. Unlike traditional insurance policies, which charge a fixed premium regardless of how much you use your car, pay-per-mile insurance allows you to pay a base rate, plus an additional charge for each mile you drive. This can be a cost-effective option for people who don’t drive very often, as they only pay for the miles they actually use. In simple terms, the less you drive, the less you pay, making it a flexible and economical choice for infrequent drivers.

Who should use pay-per-mile car insurance?

Pay-per-mile insurance is like a special kind of car insurance that’s super helpful for people who don’t drive a lot. This includes folks who:

  • Work from home – If you have a job where you don’t need to commute to an office, you’re not driving much, right?
  • Are in college – College students often live on or near campus and may not use their cars much.
  • Take buses, walk, or use other ways to get around – If you’re a fan of public transportation, walking, or biking, you’re not putting many miles on your car.
  • Have a second car that sits around – Some people have two cars, but they hardly use one. If that’s you, there’s a special tip: You might want to think about getting a separate pay-per-mile insurance just for that little-used car.

Now, here’s the big question: How little is “little” when it comes to driving? Well, on average, people in the U.S. drive about 13,500 miles every year. But it’s a bit tricky to figure out exactly how few miles you need to drive to save with pay-per-mile insurance.

One company called Mile Auto says if you drive less than 10,000 miles a year, you’re probably paying too much for regular car insurance. Another company, Nationwide, says you’ll get the most benefits from their pay-per-mile plan if you drive less than 8,000 miles each year.

So, if you don’t drive a whole lot, pay-per-mile insurance might be a smart choice for you. It can save you some money, especially if you fall into one of those categories we talked about earlier.

How does pay-per-mile car insurance work?

Imagine you’re getting car insurance, but it’s a bit different. It’s called pay-per-mile car insurance. Instead of just paying a fixed amount each month, you pay two things: a base fee (like a starting cost) and a fee for every mile you drive.

So, let’s break it down:

  • Base Rate: You start with a base fee, kind of like a minimum cost for having insurance. This base fee depends on things like how old you are, what car you drive, and how good or bad your driving history is. Usually, it’s around $30 or more each month.
  • Mileage Fee: Now, for every mile you drive, they add a little extra charge, like a few cents for each mile. For example, if you drive 200 miles in a month and they charge 4 cents for each mile, you’d pay $8 for the miles on top of your base fee.
  • No Driving, No Mileage Fee: If you don’t drive your car at all for one month, you only pay that base fee we talked about. You don’t have to worry about mileage charges because you didn’t go anywhere.
  • Mileage Limit: To keep things fair, they set a limit on how many miles they’ll charge you for in a single day. This is like a daily mileage cap, and it’s usually around 250 miles. If you drive more than that in a day, you won’t pay extra for those extra miles.
  • How they know you’re Miles: To keep track of how much you drive, the insurance company might put a little device in your car. It counts your miles and helps figure out your bill.

So, why would you want this type of insurance? Well, if you’re someone who doesn’t drive a lot and you’re looking to save money on car insurance, pay-per-mile plans can be a good choice. They make sure you’re not paying for more insurance than you need. It’s kind of like paying for just the slices of pizza you eat instead of the whole pizza, if that makes sense!

Companies that offer pay-per-mile car insurance

So, you know how car insurance can be a bit confusing sometimes? Well, there’s this cool thing called pay-per-mile insurance. It’s like buying just the amount of insurance you need for how much you drive.

Only a few insurance companies offer this, like Metromile and Allstate. Here’s a quick rundown of each:

  • Allstate Milewise: They put a little device in your car, and there’s a mobile app too. These gadgets keep track of how much you drive. You can get this in a bunch of places, like Arizona, Florida, Texas, and more.
  • Metromile: These guys are experts at pay-per-mile insurance. They also use a device in your car to watch your driving. In some states like Arizona and Oregon, they even look at how you drive when it’s time to renew your insurance.
  • Mile Auto: They also do the pay-per-mile thing. But instead of a fancy device, you just have to snap a picture of your car’s odometer once a month. They work in places like California, Texas, and Florida.
  • Nationwide SmartMiles: These folks use a device in your car to see how you drive. You can get this in most states, except for a few like California and New York.

So, if you don’t drive a lot, pay-per-mile insurance might be a good choice for you. It’s like paying for just the slices of pizza you eat instead of the whole pie!

Cost of Pay-Per-Mile Insurance

You know how different stores can have different prices for the same toy? Well, it’s kinda like that with car insurance that you pay based on how much you drive. Every car insurance company can have their own prices. And just like how your friend might pay more or less for the same video game, the cost can be different for each person.

Let’s take an example with a company called Nationwide. They have something called “SmartMiles.” Imagine if regular car insurance costs $1,000 for a year. With SmartMiles, it might be around $300, which is way less. They also charge you for each mile you drive, like 6.5 cents on average. But sometimes it can be as low as 2 cents or as high as 10 cents for each mile.

Another company called Liberty Mutual has a thing called “ByMile.” They say you could save up to 40% compared to their normal prices. Metromile is another one. They say their customers save about $741 every year. They might start at $29 per month, but some people pay even less. They also charge around 5 to 7 cents for each mile.

Now, Allstate’s Milewise is a bit different. They charge you a bit every day and then add on some money for each mile you drive. You need to link your credit or debit card to your account, and they take the money after you finish driving.

Oh, and some of these programs have a limit on how much they’ll charge you for driving in a single day. Like, Metromile and Nationwide won’t make you pay for more than 250 miles in a day, and Liberty Mutual won’t charge for more than 150 miles in a day. So, if you go on a long road trip, it won’t cost you a ton.

What Pay-Per-Mile Car Insurance Covers?

Pay-per-mile insurance is kind of like regular car insurance. It takes care of the same stuff, like fixing stuff that you accidentally break when driving and paying for other people’s medical bills if you cause an accident.

Just like regular car insurance, it has to follow the rules set by your state about how much coverage you need. And if you want, you can add extra things to your pay-per-mile insurance to cover things like fixing or replacing your own car.

But here’s the cool part: some pay-per-mile insurance plans have bonus stuff. They might give you advice on how to drive better and save more money on your insurance. So it’s like getting some extra help along with your insurance!

Is Pay-Per-Mile Car Insurance Worth It?

This insurance is like a good deal for people who don’t drive their cars too much, like less than 12,000 miles every year. That’s around the same amount of driving most people in the whole country do.

To know if this kind of insurance is right for you, here’s what you need to do:

  • Figure out how many miles you drive in a year. You can do this by keeping track or looking at your car’s odometer (that’s the thing that shows how many miles your car has gone).
  • Then, you should ask different insurance companies for their prices. It’s like checking how much each company wants you to pay for this special insurance.
  • This special insurance is especially good if you don’t drive your car much. So if you’re not using your car very often, it might be a great choice.


So, to sum it up, pay-per-mile car insurance is like a great idea if you don’t drive your car a lot. To know for sure if it’s right for you, just find out how much you drive and compare prices from different insurance companies.

Here Is A List Of Important FAQS

It mostly depends on how you’ve driven before, what kind of car you have, and where you live. But on average, most people usually pay somewhere between 2 to 10 cents for each mile they drive.

See, there’s a number that tells us how much most people drive in a year. It’s about 12,000 miles. If you drive less than that, the per-mile insurance can be a great idea because it might save you money. It’s like paying less because you’re not using your car as much.

About the Author

Alex Huber is a content writer for Atoz Insurances and he is a very experienced and well-rounded freelance content writer who specializes in the insurance and finance niches. His writing is engaging and informative, and he has a strong understanding of the industries he writes about.

75% Off !
(888) 238-4419