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Last Updated on January 29, 2026
Pay-per-mile car insurance charges you a monthly base rate plus a per-mile rate—so drivers who don’t put many miles on their car can sometimes pay less than with a traditional flat premium.
This hub explains how pay-per-mile works, when it’s worth it, and which companies to consider. We’ll also clarify how pay-per-mile compares to other usage-based and telematics discount programs.
Jump to: Best Pay-Per-Mile Companies • Break-Even Mileage • Pay-Per-Mile vs UBI
Pay-per-mile car insurance is a pricing model that charges you a fixed monthly base rate plus a variable per-mile fee. The less you drive, the more likely it is that this structure can beat a traditional flat-rate premium.
To understand whether you’re truly a “low-mileage” driver, it helps to compare your driving habits to typical U.S. mileage: How many miles does the average American drive each year?
Quick gut-check: Pay-per-mile is usually worth a closer look if you drive fewer miles than you used to (WFH/hybrid, second car, city driving) and your quote’s base rate isn’t already close to your current monthly premium. The break-even section below shows how to confirm it with your real numbers.
Pay-per-mile insurance tends to work best when your car spends a lot of time parked—and you want your premium to reflect that.
Pay-per-mile programs need a way to measure mileage. Depending on the insurer, tracking may happen through:
Privacy note: Some programs track only mileage, while others may collect additional telematics data. Always review the insurer’s program details before enrolling.
Before you enroll (privacy checklist): Ask the insurer whether they track miles only or also collect location, time of day, phone use, braking, or speeding. Also confirm how long data is stored, whether it can be shared, and what happens if you stop using the device/app.
The key question is whether your pay-per-mile quote comes in below what you’d pay for a traditional flat premium. You can estimate this with a simple break-even formula.
Use real mileage (not a guess): Grab your last 2–3 months of odometer readings (or an oil-change record) and calculate your average miles per month. Then test the formula with your current mileage and a higher “busy month” estimate so you don’t get surprised later.
Pay-per-mile monthly cost = Base rate + (Per-mile rate × Miles driven)
Break-even miles/month = (Traditional monthly premium – Base rate) ÷ Per-mile rate
Tip: The base rate matters a lot. A high base rate can erase savings even if the per-mile rate looks low.
Make the math more realistic: Include any fees or minimum premiums in your estimate, and run 3 scenarios—your normal month, a higher-mileage month, and a “new commute” month. Pay-per-mile can look great at low miles but flip quickly if mileage rises.
Below are some of the most common pay-per-mile options and closely related “pay-as-you-go” style programs. Availability and pricing vary by driver, coverage, and state—so treat this as a starting point and compare quotes apples-to-apples.
Metromile is a well-known pay-per-mile option designed for drivers who put very few miles on their car. It can be a strong fit for WFH/hybrid schedules, second vehicles, and city driving where the car sits more than it moves.
Allstate Milewise is Allstate’s pay-per-mile program. It’s often positioned for low-mileage drivers who still want the structure and service of a major national insurer.
Mile Auto is another option often considered by low-mileage drivers. It’s worth comparing the base rate and per-mile cost (or mileage-based pricing) against your current traditional premium.
Hugo is commonly discussed alongside pay-per-mile because it offers a flexible payment approach. It’s best treated as an alternative for drivers who want short-term flexibility—then compared carefully to true base+per-mile pricing.
Availability heads-up: Pay-per-mile programs can be limited by state, vehicle, and driver profile. When you compare options, match coverage limits/deductibles and add-ons (rental, roadside, glass, etc.) so you’re comparing true apples-to-apples pricing.
“Usage-based insurance” is an umbrella term. Some programs price primarily on miles (pay-per-mile), while others focus on driving behavior (telematics discount programs). Here’s a quick way to tell them apart.
| Type | What changes your price | Examples |
|---|---|---|
| Pay-per-mile | Mostly miles driven (base + per-mile) | Metromile, Allstate Milewise, Mile Auto |
| Telematics / UBI discount programs | Driving behavior (and sometimes time of day, phone use, etc.) | Snapshot, Drivewise, SmartRide, IntelliDrive, DriveEasy |
| Traditional | Rating factors (history, vehicle, location, etc.) | Standard auto policies |
For a full explanation of UBI beyond pay-per-mile, read: Is Usage-Based Car Insurance Right for You?
Easy way to tell them apart: If your price is mainly base rate + per-mile, that’s pay-per-mile. If your discount depends on hard braking, speeding, phone use, or time of day, you’re looking at a telematics/UBI program (even if the marketing says “usage-based”).
These programs typically offer discounts (or pricing changes) based on how you drive—not simply how many miles you drive. They can still be a great deal for safe drivers.
Pay-per-mile insurance can be a smart way to save if your mileage is genuinely low and your quote has a reasonable base rate. Start by estimating your break-even mileage, then compare a pay-per-mile quote against a traditional policy with the same coverage limits.
If you’re still deciding between pay-per-mile and telematics discount programs, focus on what’s driving the price: miles driven vs. driving behavior. Then compare quotes with the same coverage limits and deductibles.
