When you’re trying to decrease the price of your auto insurance coverage, and you do not drive your automobile a lot, you may take into account switching to pay-per-mile or “pay as you go” automobile insurance coverage. As a substitute of paying a precise quantity every month in your auto insurance coverage protection, pay-per-mile insurance coverage enables you to pay a decrease flat fee plus cash for each mile that you simply drive.

The idea of pay-per-mile automobile insurance coverage has been round since no less than 1968 and should assist sure drivers get monetary savings. In 2008, the Brookings Institute discovered that pay-per-mile insurance coverage would save society “$50 billion to $60 billion a yr by lowering driving-related harms.”

Not solely might pay-per-mile automobile insurance coverage value you much less cash, it may additionally provide you with extra management over how a lot you drive and spend on gasoline. There’s additionally the advantage of understanding the precise value of every mile you drive. In line with Robert Lajdziak of J.D. Energy, “even prospects who aren’t saving cash are nonetheless extra happy with worth because of having extra transparency and a sense of management over their premiums.”

Learn the way pay-per-mile automobile insurance coverage works, which automobile insurance coverage suppliers provide pay as you go protection, how a lot cash you may save and whether or not or not pay-per-mile automobile insurance coverage might be a very good possibility for you. For extra, discover our prime picks for the most affordable automobile insurance coverage.

What’s pay-per-mile automobile insurance coverage?

Pay-per-mile auto insurance coverage fees you month-to-month based mostly on how a lot you drive. As a substitute of paying a set premium in your automobile insurance coverage, you may pay a variable quantity that fluctuates relying on what number of miles you place in your automobile.

How does pay-per-mile automobile insurance coverage work?

You may pay your automobile insurance coverage supplier a normal base fee, plus a per-mile fee that is multiplied by the variety of miles you drive every month.

To trace mileage, most pay-per-mile automobile insurance coverage suppliers require that you simply join an digital system to your automobile’s onboard diagnostic (OBD) port. Also referred to as telematic gadgets, these machines may also monitor different driving behaviors resembling driving velocity, acceleration and braking distance. 

If you don’t need your automobile insurance coverage firm to trace your driving behaviors, some firms allow you to monitor your mileage through smartphone apps or odometer images.

Who sells pay-per-mile automobile insurance coverage?

Presently, 4 automobile insurance coverage suppliers provide pay as you go insurance coverage: Allstate, Metromile, Mile Auto and Nationwide.

Metromile and Mile Auto are each online-only insurance coverage suppliers that solely provide pay-per-mile automobile insurance coverage. Allstate and Nationwide are bigger, conventional insurance coverage firms that promote many sorts of insurance coverage, which permits additional potential financial savings for bundling dwelling, life or different insurance coverage insurance policies.

For army members and households, it is value mentioning the “pay as you drive” automobile insurance coverage program supplied by USAA subsidiary Noblr. Its “usage-based insurance coverage” (UBI) program will decrease your invoice while you drive much less, however its algorithm for calculating your month-to-month premium is just not tied precisely to your mileage, so it isn’t technically pay-per-mile insurance coverage.

Who can get pay-per-mile automobile insurance coverage?

Pay-as-you-go automobile insurance coverage exists in a lot of the 50 US states, besides Alaska, Hawaii, Louisiana, New York and North Carolina. Account necessities range between insurance coverage suppliers.

The widest protection comes from Nationwide SmartMiles, which presents insurance policies to all states besides the 5 listed above. Smaller, online-only insurance coverage firms solely present pay-per-mile automobile insurance coverage to eight or 9 states.

How a lot does pay-per mile automobile insurance coverage value?

Charges for pay-per-mile automobile insurance coverage range relying on numerous elements. Your private month-to-month premium will rely in your age, your gender, your location, the kind of automobile you drive, different drivers of the automobile and your driving historical past — significantly any latest rushing tickets, at-fault accidents or DUIs.

Examine the pay-per-mile automobile insurance coverage suppliers and plans under to study extra about how they work and a few estimated costs for frequent eventualities.

Word: The entire supplied insurance coverage quotes are solely estimates of potential pay-per-mile automobile insurance coverage prices. Ultimate prices of precise insurance coverage insurance policies could range significantly from these estimates.

The automobile insurance coverage quotes under are based mostly alone private driving state of affairs — two drivers about 50 years outdated with clear data residing in Berkeley, California, with one automobile — a 2008 Subaru Outback. My customary quote was for $15,000 per individual ($30,000 per incident) bodily harm protection, $5,000 in property harm, $15,000 per individual ($30,000 per incident) for accidents from uninsured or underinsured motorists, and complete and collision protection with $500 deductibles for every.

Metromile

Based in California in 2011, Metromile was one of many first suppliers of pay-per-mile automobile insurance coverage. To trace mileage, Metromile makes use of a tool known as the Pulse that connects through your OBD port.

Metromile has a reasonably small footprint to date, offering insurance coverage insurance policies in eight states — Arizona, California, Illinois, New Jersey, Oregon, Pennsylvania, Virginia and Washington.

With Metromile, you are charged for every mile that you simply drive as much as 250 a day (150 a day for New Jersey). Metromile claims its prospects “save 47% on common in comparison with what they have been paying their earlier auto insurer.” 

Primarily based on my location and driving state of affairs, Metromile’s on-line system quoted me a base fee of $33 a month plus 6 cents per mile. At a driving fee of 500 miles monthly, or 6,000 miles a yr, I might pay $63 for automobile insurance coverage every month, or $756 per yr. That is for the pretty customary insurance coverage protection talked about above.

At a decrease degree of protection, with no collision, complete, or uninsured motorist protection, Metromile quoted me $20 monthly base fee and three cents per mile. Driving 500 miles a month, I might pay $35 a month or $420 per yr.

Metromile was acquired by insurance coverage firm Lemonade in Nov. 2021. It is unclear but if or how Metromile will mix with Lemonade’s owners, renters and pet insurance coverage merchandise. 

Mile Auto

Mile Auto — or just Mile, as the corporate calls itself — is exclusive within the pay-per-mile insurance coverage area as a result of it does not make you put in something that tracks your automobile’s utilization and your driving habits. 

As a substitute, Mile makes use of a smartphone app that permits you to submit footage of your automobile’s odometer. Known as MVerity, the app sends you a month-to-month reminder with a hyperlink that opens your telephone digital camera. Snap your odometer, add your pic and MVerity does the remaining. It detects your odometer knowledge by confirming your automobile and the photograph’s authenticity, after which evaluating your image to earlier odometer readings.

Additionally distinctive to Mile Auto is the shortage of a each day mileage cap. You may pay for all of your miles pushed, even on lengthy journeys. Mile Auto is out there in 9 states — Arizona, California, Georgia, Illinois, Ohio, Oregon, Pennsylvania, Tennessee and Texas.

Primarily based on a quote for location and driving state of affairs, Mile Auto estimated a base fee of $38.03 monthly and a per mile cost of 4.2 cents per mile, for a similar customary collision, complete and uninsured motorist protection parameters I used for Metromile. At 500 miles a month, that might additionally value me about $59 a month or $708 per yr. 

Nonetheless, at a minimal protection (utilizing the identical minimal private harm protection as Metromile), Mile Auto did not provide me any financial savings. It quoted me a base fee of $34.68 and a per-mile fee of 4.9 cents. At 500 miles a month, I might nonetheless pay $59 a month, or $708 per yr. Mile Auto has not but responded to requests for remark. 

Nationwide SmartMiles

Like Metromile, Nationwide SmartMiles works by plugging a small system that tracks your mileage and driving habits into your automobile’s OBD port. Additionally like a lot of the different packages, SmartMiles caps your most each day mileage at 250.

Nationwide SmartMiles is out there in 45 states and Washington, DC — each state besides Alaska, Hawaii, Louisiana, New York and North Carolina.

This program does not present a straightforward on-line quote system — you will get a quote for conventional automobile insurance coverage, however nothing that explicitly offers a month-to-month base fee or per-mile value. 

After a couple of minutes with a Nationwide consultant, I used to be capable of get a quote for protection just like the frequent insurance coverage situation described above for Metromile and Mile Auto. 

Nationwide estimated that I might pay about $65 a month with my 500-mile estimate. The consultant stated that the per-mile fee could be 5 cents, making the month-to-month base fee $40. Bear in mind, that is for $15,000/$30,000 primary bodily harm legal responsibility protection, $500 deductibles for collision and complete protection, $5,000 property harm and $15,000/$30,000 for uninsured motorist protection. 

Allstate Milewise

Milewise is one in every of Allstate’s two telematics packages — the opposite is Drivewise, a standard insurance coverage coverage that gives safe-driving reductions for these prepared to put in a monitoring system to their vehicles’ OBD ports.

Allstate Milewise is out there in 21 states — Arizona, Delaware, Florida, Idaho, Illinois, Indiana, Maryland, Massachusetts, Minnesota, Missouri, New Jersey, Ohio, Oklahoma, Oregon, Pennsylvania, South Carolina, Texas, Virginia, Washington, West Virginia and Wisconsin — in addition to Washington, DC.

Drivers in most states are capped at 250 most miles per day, although it is capped at 150 miles in Illinois, Indiana, New Jersey, Ohio and Oregon.

Allstate Milewise is not accessible in California, so I wasn’t capable of get an precise quote for my particular driver state of affairs. An Allstate consultant instructed me that, “with Milewise, low-mileage drivers can sometimes save 50% over conventional insurance coverage insurance policies.”

As a result of charges range a lot based mostly on particular person drivers and the quantity of insurance coverage protection supplied, I like to recommend taking the time to finish the web quote instruments or name the businesses to get pay-per-mile insurance coverage quotes based mostly by yourself particular driving state of affairs.

For extra studying, try our greatest low cost automobile insurance coverage firms and seven extra methods to save cash on automobile insurance coverage.

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