Is Pay-As-You-Go Auto Insurance Available in the United States?

Last Updated on December 16, 2025

Yes—pay-as-you-go (also called usage-based or pay-per-mile) car insurance is growing in the U.S. It can be a smart way to save money if you don’t drive often. The tradeoff is that your insurer may collect driving data through an app or plug-in device.

In this guide, we’ll break down how pay-as-you-go insurance works, the pros and cons (including privacy), and which major programs offer it.

Key Takeaways

• “Pay-as-you-go” can mean pay-per-mile, pay-per-day flexible coverage, or a usage-based discount program—so always confirm what you’re enrolling in.
• Most programs track mileage and driving patterns using an app or a plug-in device, and some can raise rates for risky driving behavior.
• Pay-as-you-go is usually best for low-mileage drivers (WFH, retirees, second cars) who drive mostly in safer conditions and have smooth habits.
• Before enrolling, review what data is collected (including possible GPS/phone-use data), and compare quotes against a traditional policy to confirm real savings.

What “Pay-As-You-Go” Car Insurance Really Means

“Pay-as-you-go” is used to describe a few different insurance models:

• Pay-per-mile: You pay a base rate + a per-mile charge. This is best for low-mileage drivers.
• Pay-per-day / flexible-term: You buy coverage in short chunks (days/weeks/months). Some plans let you “pause,” but a lapse can create serious problems.
• Usage-based discounts: You keep a normal policy, but you can earn a discount based on how much (and sometimes how safely) you drive.

All of these can lower costs for the right driver—but they’re not identical. Always read the program rules before enrolling.

How Does Pay-As-You-Go Insurance Work?

Pay-as-you-go insurance uses your real-world driving habits to set part (or all) of your premium. If you drive less—and you avoid risky patterns—you may pay less.

Most programs track driving using one of these methods:

• Plug-in device (OBD-II): A device installed in your car reads mileage and other trip data.
• Mobile app: Your phone collects trip data (and sometimes phone-use data while driving).
• Built-in vehicle data: Some vehicles can share mileage/trip data through connected-car systems (varies by insurer and model).

Some programs focus mostly on how much you drive (miles). Others also measure how you drive—like hard braking, rapid acceleration, speed, and time-of-day driving. If you want to learn more about the tech behind this trend, see new technology that can help you save on car insurance.

And yes—some programs can increase your rate if they flag high-risk driving behavior. Even if you don’t get tickets, aggressive driving patterns can still look risky to a telematics model. (Also: it’s brake, not “break.”)

Privacy and “Someone Is Watching” Concerns

Pay-as-you-go insurance is voluntary, but it’s still data-driven. Before you enroll, find out exactly what’s collected and how it’s used. Depending on the program, data may include:

• miles driven and trip frequency
• time of day you drive (late-night/peak traffic patterns)
• hard braking and rapid acceleration
• speed trends (in some programs)
• GPS/location data (sometimes collected even if it’s not part of the discount calculation)
• handheld phone use behind the wheel (for some app-based programs)

If privacy is a concern, read the program’s privacy statement and ask whether you can use a device instead of an app (or vice versa). And if you’re unsure, focus on savings you can control without monitoring—like increasing deductibles, comparing quotes, and using safe-driving discounts.

What Companies and Programs Offer Pay-As-You-Go Insurance?

Availability varies by state and can change over time. Here are some well-known options:

• Metromile: Metromile was best known for true pay-per-mile pricing (base rate + per-mile). In recent years, Metromile was acquired, and many shoppers are now redirected through other brands for pay-per-mile quotes. If you like the concept, it’s still worth comparing pay-per-mile options in your state.
• Hugo: Hugo is best described as flexible-term (pay-per-day/week/month) coverage designed for drivers who want tight control over payments. Some plans let you pause days you’re not driving, but be careful: a lapse in insurance can trigger DMV issues, fees, and higher rates later. Make sure any “pause” still keeps you compliant with state requirements and any loan/lease rules.
• Allstate Milewise: Milewise is a pay-per-mile style option (low daily rate + per-mile rate) in select states. It’s often a strong fit for low-mileage drivers who still want a traditional insurer and standard coverages. If you have a long commute, the math may work against you.
• Nationwide SmartRide: Nationwide offers usage-based programs that can reward safer driving with discounts. Note: SmartRide is typically the “how you drive” discount program, while SmartMiles is Nationwide’s pay-per-mile program in many states. Either way, you’ll want to confirm which program is available where you live and whether it can affect your rate upward or downward.
• Progressive Snapshot: Snapshot is a usage-based program that can provide discounts for safer driving and (often) lower mileage. Snapshot can also increase rates for risky driving in some cases, so it’s best for drivers who are confident in their driving habits and want the potential upside.

FAQs on Pay-As-You-Go Car Insurance

Is Pay-As-You-Go Insurance Worth It?

Pay-as-you-go auto insurance can be worth it if you:

• drive fewer miles than the average driver (work-from-home, retired, second car, short commute)
• rarely drive late at night and avoid heavy stop-and-go rush traffic
• have smooth driving habits (gentle braking/acceleration)
• are comfortable sharing driving data in exchange for possible savings

It’s usually not ideal if you drive long distances, have an aggressive commute, share your car with unpredictable drivers, or you’re worried about privacy.

The best way to decide is simple: get a quote for a standard policy and a pay-as-you-go option, then compare the total cost based on your realistic annual mileage and driving patterns. If you’re a safe driver, savings can be real. If you’re not, a monitor may not help your case—and could even backfire.