Car insurance can be a big expense — the average driver pays more than $200 per month for full coverage in the U.S. If you're not driving much because you work from home, are retired or take public transit often, paying this much for car insurance can feel less justifiable.
However, there is a solution. Pay-per-mile car insurance bases your rate on how much you drive, charging a daily base fee plus a few cents per mile, according to Carinsurance.com. The amount you pay per mile can vary by insurer.
Not all companies offer pay-per-mile insurance — and it's not available in every state — but you could see considerable savings: Metromile says its customers can save over 40% compared to traditional insurance, while Nationwide reports that its pay-per-mile customers save an average of 25% when compared to the brand's traditional auto policy.
Here's how pay-per-mile car insurance works and the standout companies that offer it, based on cost, coverage, customer satisfaction and other factors.
Find car insurance that's right for you
What is pay-per-mile car insurance?
Most drivers pay a flat rate for car insurance, regardless of how much they drive. However, several insurers tout special policies with lower rates for infrequent drivers.
Instead of a standard premium, pay-per-mile insurance has a low monthly base fee plus a few cents per mile on top of that, according to the companies we reviewed. Pay-per-mile is a type of usage-based insurance, an umbrella term encompassing any program that tracks your driving behavior.
Pay-per-mile policies generally offer similar types of coverage as a traditional policy, including liability insurance and comprehensive and collision coverage, as well as add-ons like personal Injury protection (PIP) and medical payments coverage.
How does pay-per-mile car insurance work?
Pay-per-mile car insurance companies track your mileage, usually with an app on your mobile phone or a transmitter installed under the steering column. The data is sent to your insurance company to tabulate your per-mile total.
Unlike traditional car insurance, premiums for pay-per-mile policies can fluctuate from month to month depending on how much you drive.
When determining your base rate, insurers may also incorporate driving behaviors, like your speed, braking and the time of day you drive. Read the fine print of your policy to see if your car insurance company records and uses this data to determine your rates.
Best pay-per-mile car insurance companies
Here are our top picks for pay-per-mile car insurance.
Best for availability: SmartMiles
SmartMiles® by Nationwide
Cost
The best way to estimate your costs is to request a quote
App available
Yes
Policy highlights
SmartMiles® is the most widely available pay-per-mile auto insurance, available in 44 states. Mileage is tracked through a device plugged into your vehicle or through your vehicle's existing system. If you take road trips, only the first 250 miles of driving per day count towards mileage.
Pros
- Available in 44 states
- 250-mile road trip exception
- Can save up to 30% according to Nationwide
Cons
- Not available in all states
- Your driving data is tracked
Who's this for? SmartMiles by Nationwide is available in 44 states and Washington, DC. That's a big plus, since most other car insurance companies operate in only a handful of states.
Standout benefits: With SmartMiles, base rates and per-mile costs don't fluctuate over the policy term unless you make changes. Nationwide also offers a discount of up to 10% for safe driving after your first renewal (typically six months).
Available in: All states except Alaska, Hawaii, Louisiana, New York, North Carolina and Oklahoma.
Best for affordability: Mile Auto
Mile Auto
Cost
Get a rate estimate online or request a quote from an agent.
App available
No
Policy highlights
Mile Auto offers liability, collision and comprehensive insurance, as well as optional personal injury protection, MedPay, rental vehicle reimbursement and roadside assistance. Users submit a snapshot of the odometer each month to verify mileage.
Pros
- Doesn't require app or telematics device
- Lower rates than other pay-per-mile insurers
Cons
- Only available in a few states
- Limited online features
- No discounts
- Deposit may be required
Who's this for? Mile Auto states that customers typically save 30% to 40% on their car insurance rates when compared to typical auto insurance policies.
Standout benefits: Mile Auto doesn't track or collect your driving data like many other pay-per-mile programs. However, it does require a monthly photo of your odometer, so your rate won't be based on driving behavior.
Available in: Arizona, Colorado, Florida, Georgia, Ohio, Oregon, Tennessee, and Texas
Best for discounts: Metromile
Metromile Auto Insurance
Cost
The best way to estimate your costs is to request a quote
App available
Yes
Policy highlights
Metromile is backed by Lemonade and offers pay-per-mile insurance in eight states. Discounts are available for bundling and insuring multiple cars. The Ride Along program tracks driving behavior and offers a discount of up to 15%.
Pros
- Quotes available online
- Free street-sweeping alerts
- Tryout period available
Cons
- Only available in eight states
- Trip duration, speed and time of day may affect your rate
Who's this for? Metromile is a subsidiary of Lemonade, one of our top picks for homeowners insurance and renters insurance. Rates start at just $29 a month plus a few cents for each mile you drive, and Metromile also offers discounts for safe driving, insuring multiple cars and bundling with Lemonade homeowners insurance.
Standout benefits: Metromile customers are charged for up to 250 miles per day.
Available in: Arizona, California, Colorado, Illinois, Indiana, Ohio, Oregon, Tennessee, Texas, and Washington.
Best for active military and veterans: USAA SafePilot Miles
USAA Auto Insurance SafePilot Miles Program
Cost
The best way to estimate your costs is to request a quote
App available
Yes
Policy highlights
USAA's usage-based auto insurance policy offers new enrollees to save 20% off their premium for driving fewer miles and a discount of up to 20% for safe driving after their first renewal.
Pros
- Quotes available online
- Easy-to-use mobile app
- Costs won't exceed a specified limit for the first six months in some states
Cons
- Not available in Alaska, California, Connecticut, Maryland, Michigan, New Jersey, New York, North Carolina, Pennsylvania, Vermont, and Washington state
- Limited to active military, veterans and their family
- Rate may be determined by driving habits
Who's this for? USAA's pay-per-mile plan, SafePilot Miles, is exclusively for active duty service members, veterans and their families.
Standout benefits: SafePilot Miles offers discounts for new customers along with renewing and paying your fixed rate upfront.
Available in: All states except Alaska, California, Connecticut, Maryland, Michigan, New Jersey, New York, North Carolina, Pennsylvania, Vermont, and Washington.
| Milewise | Metromile | SmartMiles | Noblr | |
|---|---|---|---|---|
| Availability | 18 states | 8 states | 44 states | 15 states |
| Backer | Allstate | Lemonade | Nationwide | USAA |
| Equipment needed | App and plug-in device | Plug-in device | Plug-in device | App |
| How am I charged? | Base rate and mileage deducted from a prepaid account | Each month users pay base rate and mileage from the month prior. | Each month users pay base rate and mileage from the month prior. | Each month users pay base rate and mileage from the month prior. |
| Driving behaviors tracked | Time, location, braking, accelertion calculated into rate. | Speed, trip duration and time of day and week can impact rate | Hard braking, acceleration and nighttime driving may impact rate | Acceleration, braking, time of day, phone use and types of roads recorded |
| Perks | Safe-driving discount, 250-mile daily cap | Discounts for safe driving, multiple cars; Free street-sweeping alerts; 250-mile cap per day | Safe-driving discount, 250 mile-cap per day | Rate won't exceed specified maximum in first six-month term. Discounts for new customers, paying in full, renewing and referring |
| Savings over traditional insurance | 50% | 47% | 30% | 50% or more |
Pay-per-mile pros and cons
Pros:
- Cheaper rates. Pay-per-mile companies tout that customers can save more than 40% on average.
- Full coverage options. While you might sacrifice extras, you can still get full coverage, plus add-ons like roadside assistance and rental car reimbursement.
Cons
- Limited availability. Pay-per-mile isn't offered in all states or by all providers.
- Your bill will fluctuate. Rates are based on your mileage, so your pay may fluctuate.
- Data is collected. Though it could lower your premium, your insurance company will have data on your driving habits
Is pay-per-mile car insurance worth it?
Whether pay-per-mile makes sense depends on how much you drive: If you average 360 miles a month and have a base rate of $45 with a 6-cents-a-mile add-on, your cost would be about $67 a month or $800 a year, according to MileWise. Compare that with the cost of the average traditional full-coverage policy, which is $2,697 annually, per Bankrate.
Pay-per-mile car insurance is most beneficial if you drive 10,000 miles a year or less. In 2023, motorists in the U.S. averaged about 12,200 miles per year, according to a Kelley Blue Book analysis of U.S. Department of Transportation's Federal Highway Administration data.
However, to participate in a pay-per-mile program, you'll generally need to install a device in your car or an app on your phone. These devices or apps track more than your mileage — they often collect and share data on your speed, braking, acceleration and the time of day you drive. If you are concerned about how your data is shared, think carefully before signing up for pay-per-mile insurance.
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FAQs
How much does pay-per-mile insurance cost?
Your base rate will depend on your car, coverage, driving history and state of residency, among other factors. Additionally, you'll pay a small fee per mile driven, typically between 4 and 8 cents.
What companies offer pay-per-mile car insurance?
While pay-per-mile insurance is not commonly available, Smartmiles by Nationwide, Mile Auto, Metromiles and USAA all offer it.
Who is pay-per-mile car insurance good for?
Car owners who drive less than 10,000 miles a year will save the most with pay-per-mile insurance, so it could be a good fit for older people, remote workers and college students. If you have a bad driving record, you may also come out ahead.
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Why trust CNBC Select?
At CNBC Select, our mission is to provide our readers with high-quality service journalism and comprehensive consumer advice so they can make informed decisions with their money. Every pay-per-mile car insurance review is based on rigorous reporting by our team of expert writers and editors with extensive knowledge of car insurance products. While CNBC Select earns a commission from affiliate partners on many offers and links, we create all our content without input from our commercial team or any outside third parties, and we pride ourselves on our journalistic standards and ethics. See our methodology for more information on how we choose the best car insurance.
Our methodology
To determine the best pay-per-mile car insurance companies, CNBC Select looked at various U.S. car insurance companies that offer this type of coverage.
When narrowing down and selecting the top pay-per-mile insurers, we considered rates, coverage types, discounts, availability and customer satisfaction, using data from J.D. Power and the Better Business Bureau.
We sorted our top picks by the:
- Best for availability: Smartmiles
- Best for affordability: Mile Auto
- Best for discounts: Metromile
- Best for active military and veterans: USAA SafePilot Miles
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