Pay-Per-Mile Car Insurance: Best Companies, Costs, and When It Saves You Money

Last Updated on January 26, 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

Key Takeaways

  • Pay-per-mile is usually priced as a base rate + per-mile rate.
  • It’s often best for low-mileage drivers (WFH/hybrid, retirees, second cars, city drivers).
  • It’s not the same as telematics “safe driving” discount programs like Snapshot or Drivewise.
  • Your savings depend on your base rate, per-mile rate, coverage, and how much you drive.
  • Most programs require tracking via a device, app, or connected-car data.
Table Of Contents
  1. Key Takeaways
  2. Best for
  3. Not ideal for
  4. Break-even formula
  5. Example (replace with your own quote numbers)
  6. Metromile
  7. Allstate Milewise
  8. Mile Auto
  9. Hugo (pay-as-you-go style)
  10. Also considered by many low-mileage drivers (not always true pay-per-mile)
  11. Big-name telematics programs
  12. Other popular programs
  13. Pros
  14. Cons

What Is Pay-Per-Mile Car Insurance?

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?

Who Should Consider Pay-Per-Mile?

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.

Best for

  • Work-from-home or hybrid drivers
  • Retirees or occasional drivers
  • Second cars / “weekend cars”
  • Urban drivers who use transit often
  • Households that drive fewer miles than average

Not ideal for

  • Long commuters
  • Frequent road-trippers
  • People who expect mileage to jump soon
  • Anyone uncomfortable with mileage/telematics tracking

How Pay-Per-Mile Tracking Works

Pay-per-mile programs need a way to measure mileage. Depending on the insurer, tracking may happen through:

  • A plug-in device that connects to your car’s OBD-II port
  • A mobile app
  • Connected-car / built-in vehicle data (varies by vehicle and insurer)

Privacy note: Some programs track only mileage, while others may collect additional telematics data. Always review the insurer’s program details before enrolling.

Break-Even: When Pay-Per-Mile Beats Traditional Insurance

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.

Break-even formula

Pay-per-mile monthly cost = Base rate + (Per-mile rate × Miles driven)

Break-even miles/month = (Traditional monthly premium – Base rate) ÷ Per-mile rate

Example (replace with your own quote numbers)

  • Traditional premium: $160/month
  • Pay-per-mile base rate: $70/month
  • Pay-per-mile rate: $0.07 per mile
  • Break-even: (160 – 70) ÷ 0.07 = ~1,285 miles/month

Tip: The base rate matters a lot. A high base rate can erase savings even if the per-mile rate looks low.

Best Pay-Per-Mile Insurance Companies

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

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.

  • Best for: very low-mileage drivers
  • Pricing style: base rate + per-mile rate
  • Tracking: mileage tracking required (method varies)

Allstate Milewise

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.

  • Best for: low-mileage drivers who want a big-carrier option
  • Pricing style: base rate + per-mile rate
  • Related program: Allstate also offers telematics discounts via Drivewise (not pay-per-mile)

Mile Auto

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.

  • Best for: drivers who want pricing tied closely to miles driven
  • Compare: base rate, per-mile cost, fees, and tracking details

Hugo (pay-as-you-go style)

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.

Also considered by many low-mileage drivers (not always true pay-per-mile)

  • Noblr (usage-based / telematics-focused)
  • Root (usage-based / driving-behavior-focused)

Pay-Per-Mile vs Usage-Based Insurance (UBI) vs Telematics Discounts

“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.

TypeWhat changes your priceExamples
Pay-per-mileMostly miles driven (base + per-mile)Metromile, Allstate Milewise, Mile Auto
Telematics / UBI discount programsDriving behavior (and sometimes time of day, phone use, etc.)Snapshot, Drivewise, SmartRide, IntelliDrive, DriveEasy
TraditionalRating 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?

Telematics / UBI Programs People Often Confuse With Pay-Per-Mile

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.

Big-name telematics programs

Other popular programs

Pros and Cons of Pay-Per-Mile Insurance

Pros

  • Transparent pricing tied to miles driven
  • Can be cheaper for low-mileage households
  • Great for second cars and “mostly parked” vehicles
  • Makes it harder to overpay for unused mileage

Cons

  • Base rates can be high (reducing savings)
  • Costs rise quickly if your driving increases
  • Tracking required (device/app/connected data)
  • Not available everywhere

How to Compare Pay-Per-Mile Quotes (and Avoid Bad Comparisons)

  • Match coverage limits and deductibles exactly (apples-to-apples).
  • Ask for both: a pay-per-mile quote and a traditional quote.
  • Confirm how mileage is measured and what data is collected.
  • Watch for fees, minimum premiums, and device/app requirements.
  • Re-quote if your mileage changes (new job, new commute, lifestyle change).

FAQs

Conclusion

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.