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Mandy Sleight has over 15 years of insurance knowledge and expertise in auto, home, life, health, pet, supplemental benefits, and other insurance products. She’s a sought-after insurance expert, appearing in Bankrate.com, Moneygeek.com, U.S. News & World Report, Reviews.com, CNET, and other publications, and she's been writing for Compare.com since 2023.
Mandy uses her background and experience working for well-known insurance companies like State Farm and Nationwide Insurance to create engaging and easy-to-understand content that helps readers make smarter insurance choices that have a positive effect on their budgets and finances.
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Matthew Gross is an editor at Compare.com. With a background in editing and SEO, he’s passionate about creating content that helps readers get the information they need to make more informed decisions. Prior to Compare.com, Matthew brought his user-centered approach to his work with global brands like Apple and Adobe.
Matthew graduated from Illinois State University, where he earned his bachelor’s degree in Journalism.
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Pay-as-you-go car insurance may be a cheaper option if you don’t drive often and need standard auto coverage. Instead of paying a flat monthly rate, you pay based on how many miles you actually drive.
Pay-as-you-go insurance could be a great fit if you live in the city, work remotely, or have a short commute. Car insurance companies like Allstate and Nationwide offer pay-per-mile car insurance, along with newer companies like Lemonade and Mile Auto.
We’ll break down how pay-as-you-go insurance works, who it’s right for, the best companies, and how to determine if it fits your needs.
Pay-as-you-go insurers use traditional rating factors to determine your base rate then charge a per-mile rate based on the number of miles you drive each month.
Some pay-as-you-go insurers also look at driving habits, like hard braking and speeding, to determine premiums.
Usage-based programs, like pay-as-you-go insurance, offer the same coverage options as traditional car insurance policies.
Pay-as-you-go car insurance — also known as pay-per-mile or pay-as-you-drive — charges you based on how much you actually drive.
Unlike traditional auto insurance, which sets a flat monthly premium based on factors such as your age, location, and vehicle type, pay-as-you-go insurance calculates a base rate plus a per-mile rate. Your monthly cost changes depending on your mileage and, in some cases, your driving behavior.
Most pay-as-you-go programs track your miles with an app, plug-in device, connected car, or odometer reading. Some also monitor your driving habits, like speeding and hard braking, which can affect your rates.
Despite the pricing differences, you usually have the same coverage options as with traditional policies. You can still choose liability, comprehensive, collision, and uninsured motorist coverages — it’s just the billing model that changes. This makes pay-as-you-go car insurance ideal for low-mileage drivers who want to save money without sacrificing coverage.
Get personalized quotes and save money in seconds.
Flexible pricing based on actual miles you drive
Same coverage options as traditional policies
Ideal for people who don’t drive often
Per-mile costs can add up on long trips
Some programs monitor your driving behavior
Monthly rates vary
If you don’t drive often, pay-as-you-go insurance can help you save money on car insurance. Because you pay only for the miles you drive — plus a flat base rate — it’s perfect for cutting costs while still getting the coverage you need.
But if your driving habits change or your mileage increases, you could end up paying more than with a traditional policy. To make sure pay-per-mile car insurance is right for you, consider how frequently you’re on the road before switching.
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Pay-as-you-go car insurance is best if you drive less than average — typically fewer than 8,000 to 10,000 miles per year. If you fall into one of the categories below, you might find major savings:
Remote workers who rarely commute
Retirees who don’t drive daily
City dwellers who mainly rely on public transportation
Owners of multiple cars with a vehicle they only use occasionally
College students who don’t drive often
Stay-at-home parents who take short trips
Keep in mind that if you’re a high-mileage driver or regularly commute long distances, pay-per-mile insurance might actually cost you more than a standard policy — especially with companies that don’t have daily mileage caps.
Before making the switch, it’s a good idea to compare quotes to determine your base rate and per-mile rate, and then estimate your monthly cost based on your recent mileage.
Program  | Pricing Model | Tracking Method | Availability | Who It’s Best for |
|---|---|---|---|---|
| Allstate Milewise | Daily rate + per-mile rate | Plug-in device + mobile app | 21 states | Drivers who want personalized feedback to improve their rates |
| Nationwide SmartMiles | Monthly base rate + per-mile rate | Plug-in device or connected car | 44 states | Most drivers |
| Mile Auto | Monthly base rate + per-mile rate | Odometer photo | 8 states | Privacy-conscious drivers who want simple, no-device pay-per-mile tracking |
| Lemonade pay-per-mile | Traditional model for first term, then usage-based pricing or monthly base rate + per-mile rate (depending on state) | Mobile app or plug-in device | 9 states | Tech-savvy, safe drivers |
| USAA SafePilot Miles | Monthly base rate + per-mile rate | Mobile app | 39 states | People who drive 8,000 miles or fewer per year |
While all five programs use mileage to determine pricing, they differ in how they track miles. For example, Mile Auto skips the plug-in device entirely, while Lemonade and USAA have more detailed behavior tracking. Insurers primarily use a monthly base rate plus a per-mile rate pricing model, though Allstate uses a daily rate.
Availability by state also varies widely, as do the types of eligible vehicles. Let’s take a closer look at each program to help you decide which one best fits your needs.
Personalized feedback based on on driving behavior
Customizable mileage per vehicle
In-app weekly bill tracking
Automatically replenishes funds
High-risk drivers may pay more
Requires plug-in device and mobile app
Allstate Milewise has a daily cap of 150–250 miles, but it offers an unlimited option for higher-mileage vehicles, depending on where you live. In some states, your driving behavior can also affect your premiums.
Milewise automatically charges the card on file when you reach your minimum balance, but you can check your weekly spending to avoid blowing your budget.
Available in 44 states
Safe driving discount offered at renewal
Highly rated usage-based insurance program[1]
Some vehicle types not eligible
Plug-in device or connected car required
Collects driving data
Nationwide SmartMiles is the most widely available pay-as-you-drive car insurance program in our lineup. It comes with a road trip exception, with a daily cap of 250 miles for people who drive more than a few hours in a day. You can also save up to 10% at your first policy renewal for safe driving habits.
| AM Best AM Best analyzes an insurer’s financials, operating performance, business profile, and other factors to generate an opinion-based rating of a company’s financial and credit strength. Ratings range from A++ (exceptional) to D (poor). | NR |
|---|---|
| Our Rating Compare.com's ratings are determined by our editorial team. The objective formula used in these reviews weighs several important factors to consider when choosing financial products and services, including customer satisfaction ratings, ease of use, and a number of other components. | 4.4 /5 |
| Liability Only Liability-only insurance, sometimes called minimum-coverage insurance, pays for bodily injury and property damage to others in an accident the policyholder causes. It does not pay for the insured’s own damages. | $69/mo |
| Full Coverage Full-coverage car insurance generally includes liability, collision, and comprehensive coverage, and may include other optional coverages such as uninsured motorist coverage. Collision covers a policyholder’s repair or replacement costs in case of an accident. Comprehensive covers damages caused by non-accident events. The average quote displayed here reflects policies with the following coverage limits: $50,000 bodily injury liability per person; $100,000 bodily injury liability per accident; $50,00 property damage liability per accident; $1,000 collision deductible; and a $1,000 comprehensive deductible. | $109/mo |
Mile Auto is a hassle-free, privacy-friendly option if you want to skip telematics tracking and avoid having your driving habits determining your premium. You simply submit a photo of your odometer each month and pay based on the number of miles you drove.
That said, Mile Auto does use standard rating factors to determine your base rate, which can include your driving record, age, credit history, location, and vehicle type. It’s also only available in a handful of states.
No required plug-in device or app
Easy odometer photo tracking
Privacy-focused
Available in only eight states
No daily mileage cap
Mixed customer reviews[2]
| AM Best AM Best analyzes an insurer’s financials, operating performance, business profile, and other factors to generate an opinion-based rating of a company’s financial and credit strength. Ratings range from A++ (exceptional) to D (poor). | NR |
|---|---|
| Our Rating Compare.com's ratings are determined by our editorial team. The objective formula used in these reviews weighs several important factors to consider when choosing financial products and services, including customer satisfaction ratings, ease of use, and a number of other components. | NR |
Lemonade pay-per-mile insurance caters to low-mileage, tech-friendly drivers who don’t need personalized agent support. It tracks your mileage and driving behavior with a mobile app or a plug-in device.
You can get a discount on your Lemonade policy if you have a hybrid or electric vehicle (EV), potentially saving you even more. Other discounts include bundling, receiving an early quote, and maintaining an accident-free driving record for five years.
App-based data tracking
Fast claims process
Donates profits
Uses driving behavior and history to set rates
Available in only nine states
Limited phone support
Safe driving discount available at policy renewal
Includes crash assistance
Fast claims process
Driving behavior affects rates
Phone use can raise rates
Available only to USAA members
USAA SafePilot Miles uses a mileage tracker app to monitor how far you travel and your driving behaviors. It includes a 14-day learning period for the app to learn your driving habits.
USAA uses your mileage and driving behaviors to calculate an overall driving score, which affects your rates. Track your trips in the app to learn how you can raise your score for the best savings.
The terms may be similar, but pay-as-you-go and usage-based insurance aren’t the same thing. Pay-per-mile charges you based on how far you drive, while usage-based insurance also tracks how you drive, including braking, speed, and phone usage.
Both use telematics data, but pay-as-you-go rates are based only on your mileage, while usage-based programs change rates depending on your driving behavior.
Some insurers combine both models, so you should check what an insurer tracks and how it uses your data.
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If you’re not sure if pay-as-you-go insurance fits your needs, here’s a quick checklist to help you decide:
Track your mileage. If you drive 8,000–10,000 or fewer miles per year, you may save money with pay-per-mile insurance.
Consider your driving habits. Pay-as-you-go is great if you take short trips and drive safely. But it might be more expensive than a traditional policy if you travel a lot or are a high-risk driver.
Decide your technology comfort level. Most programs use a plug-in device, a connected car, or a mobile app. Plug-in devices are relatively simple to install, and mobile apps can be tricky if you’re not technologically savvy.
Check availability in your state. Not all programs are available nationwide. Make sure you check which insurers serve your area.
Compare quotes. Use a car insurance comparison website to check pay-per-mile and traditional plans.
Compare rates and save money on the coverage you need.
If you’re thinking about switching to pay-as-you-go car insurance, we’re here to help. Below, we answered some common questions from drivers about pay-per-mile insurance.
It depends. If you drive fewer than 10,000 miles per year, your car insurance could be cheaper if your insurer factors mileage into your premium. Most pay-per-mile programs are designed to reward low-mileage drivers with lower monthly rates. But your mileage doesn’t matter as much with a traditional car insurance policy.
Insurers track mileage with plug-in devices, mobile apps, connected car features, and monthly odometer photos. Each company is different, so check which methods your insurer uses.
It depends. Some insurers cap daily miles at 150–250 miles, so you don’t have to worry about occasional long drives. Mileage caps vary by company and state.
No. Temporary car insurance provides short-term coverage for a few days or weeks. Pay-as-you-go is an ongoing policy that bases rates on mileage, driving habits, or both.
Data scientists at Compare.com analyzed more than 50 million real-time auto insurance quotes from more than 75 partner insurers in order to compile the rates and statistics seen in this article. Compare.com’s auto insurance data includes coverage analysis and details on drivers’ vehicles, driving records, insurance histories, and demographic information.
All the rates listed in this article have been collected from a combination of real Compare.com quotes and external insurance rate data gathered in collaboration with Quadrant Information Services. Compare.com uses these observations to provide readers with insights into how auto insurance companies determine their premiums.
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Mandy Sleight has over 15 years of insurance knowledge and expertise in auto, home, life, health, pet, supplemental benefits, and other insurance products. She’s a sought-after insurance expert, appearing in Bankrate.com, Moneygeek.com, U.S. News & World Report, Reviews.com, CNET, and other publications, and she's been writing for Compare.com since 2023.
Mandy uses her background and experience working for well-known insurance companies like State Farm and Nationwide Insurance to create engaging and easy-to-understand content that helps readers make smarter insurance choices that have a positive effect on their budgets and finances.
Matthew Gross is an editor at Compare.com. With a background in editing and SEO, he’s passionate about creating content that helps readers get the information they need to make more informed decisions. Prior to Compare.com, Matthew brought his user-centered approach to his work with global brands like Apple and Adobe.
Matthew graduated from Illinois State University, where he earned his bachelor’s degree in Journalism.
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