Looking for ways to get cheap car insurance? Pay-per-mile car insurance offers an alternative for drivers who drive less than 10,000 miles per year.

This ultimate guide explains how to choose the best pay-per-mile insurance, how pay-per-mile insurance works, its tracking devices, discounts offered, and myths.

Learn about various providers and their offerings, with Allstate leading the market with the cheapest pay-per-mile insurance at $40 monthly. Enter your ZIP code into our free comparison tool to see how much car insurance costs in your area.

What You Should Know

• Companies track mileage through plug-in devices, mobile apps, or telematics systems
• Allstate provides the lowest average pay-per-mile rates at $40 per month
• You can maximize savings by bundling other policies with pay-per-mile insurance

How Pay-Per-Mile Car Insurance Works

Pay-per-mile car insurance is a usage-based auto insurance model that charges drivers based on how often they drive rather than a fixed monthly premium. Coverage includes liability, collision, comprehensive, and uninsured motorist coverage, similar to traditional insurance.

How pay-per-mile car insurance works is simple. Insurers track mileage through a telematics device, mobile app, or odometer readings. How your driving is tracked varies by provider. Some only record only miles driven, others factor in driving habits like speed or braking.

Who should use pay-per-mile car insurance? It's best for people with predictable driving habits, remote workers, retirees, or those who rely on public transportation. If you drive under 10,000 miles annually, you could save significantly compared to traditional policies. However, high-mileage drivers may find standard insurance more cost-effective.

How to Track Your Mileage for Pay-Per-Mile Insurance

Insurance companies track mileage for pay-per-mile policies using various methods. Most providers require a plug-in device that connects to your car’s OBD-II port, such as Metromile’s Pulse device, which automatically records mileage.

Others, like Nationwide’s SmartMiles, use a mobile app with GPS tracking. Some insurers, including Allstate and Liberty Mutual, may sync with your vehicle’s built-in telematics system.

Read More: Top Ways Customers Save Money on Car Insurance

Best Pay-Per-Mile Car Insurance Rates

Pay-per-mile premium calculation includes a base monthly rate plus a per-mile charge, an affordable option for low-mileage motorists. The cheapest pay-as-you-go car insurance rates depend on your provider, location, and driving habits.

On average, companies charge between $0.02 and $0.10 per mile. Use the table below to compare the top pay-per-mile car insurance companies & their average monthly rates for low-mileage drivers.

Insurance Company	Monthly Rates
	$40
	$95
	$69
	$45
	$75
	$67
	$42
	$86
	$58
	$82

Allstate and Nationwide pay-per-mile often provide competitive rates, but Metromile is a provider that specializes in affordable mileage-based car insurance. Learn more in our Metromile review. For real customer experiences, pay-per-mile car insurance reviews on Reddit can offer insights on pricing and service quality:

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Pay-per-mile car insurance is a cost-effective option for low-mileage drivers, with competitive rates from top providers and valuable insights available through free comparison tools and real customer experiences.

Discounts & Savings With Pay-Per-Mile Car Insurance

Can you save with pay-per-mile insurance? Yes, and the best low-mileage car insurance companies provide discounts for safe driving, anti-theft devices, and bundling multiple policies.

Insurance Company	Available Discounts
	Low Mileage, Safe Driving, Bundling, Multi-Vehicle
	Reduced Usage, Safe Driver, Young Driver, Vehicle Safety
	DriveEasy Telematics, Good Driver, Military, Multi-Policy
	RightTrack Safe Driver, Hybrid Vehicle, Home & Auto Bundle, Good Student
	RealDrive Pay-Per-Mile, Anti-Theft, Multi-Car, Senior Driver
	Pay-Per-Mile Savings, Safe Driving, Defensive Driving, Low Mileage
	SmartMiles Low Mileage, Accident-Free, Multi-Policy, Anti-Theft
	Drive Safe & Save, Good Student, Multiple Vehicle, Home & Auto Bundle
	IntelliDrive Safe Driving, Hybrid Vehicle, Continuous Coverage, Multi-Car
	SafePilot Telematics, Military, Defensive Driving, Multi-Policy

For example, Nationwide SmartMiles rewards accident-free driving, while Metromile offers additional savings for safe driving habits. Driving under 10,000 miles yearly with a pay-per-mile policy and discounts can save you more than traditional insurance.

Pay-Per-Mile Car Insurance Myths

Many drivers assume that pay-per-mile insurance is only for occasional drivers, but even those who drive over 11,000 miles annually can benefit. Allstate offers a special program called Milewise Unlimited for high-mileage drivers.

However, the drawbacks of pay-per-mile insurance include potentially high costs for frequent drivers and the requirement to install a tracking device. Understanding the facts helps drivers determine if this usage-based model aligns with their needs.

Read More: Busted! The 7 Biggest Car Insurance Myths Debunked

Pay-Per-Mile Car Insurance Comparison

When picking out a pay-per-mile policy, evaluate your annual mileage, compare base rates and per-mile charges, and consider the tracking method each insurer uses.

Allstate offers the most competitive average monthly rates at $40 monthly and a unique program for high-mileage drivers. Nationwide SmartMiles is also competitive at $42 per month. Both of these companies only track mileage, while other providers, like State Farm, track driving habits, which raises rates. Compare Allstate vs. State Farm car insurance).

This mileage-based model of insurance works best for remote workers, retirees, and part-time drivers. Compare prices among several providers to get the best offer. See how much you’ll pay for car insurance by entering your ZIP code into our free comparison tool.