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It's My Car Car Auto Insurance

What You Need To Know


Sep 9, 2023

Almost every state requires drivers to have car insurance. However, with the average American paying over $2,000 per year for full coverage according to Bankrate data, that expense can be hard to justify when you drive very little.  

If you’re shopping for car insurance, you may have come across pay-per-mile car insurance, a type of coverage that lets you pay a daily base rate plus a per-mile rate as you drive. While it’s a good choice for some drivers — notably those who work remotely and retirees — it’s not a good fit for every driver.  

Here, CNBC Select breaks down what you need to know about pay-per-mile car insurance and the top insurers that offer this type of coverage.

What we’ll cover

What is pay-per-mile car insurance? 

Pay-per-mile car insurance is a type of car insurance coverage that tracks the amount you drive each month and then charges a base rate and a per-mile rate. Generally, you can get the same or similar types of coverage you’d get from a standard car insurance policy, including liability coverage and the option of full coverage car insurance to include collision and comprehensive coverage in your policy.

Compared to standard car insurance, pay-per-mile car insurance might be cheaper if you drive less than the average driver. In the U.S., that average is about 13,400 miles per year, according to 2022 data from the U.S. Department of Transportation. According to Metromile, a pay-per-mile insurance company, those who drive 10,000 miles per year or less are the most likely to save with this type of coverage.  

Pay-per-mile car insurance premiums are calculated based on two primary factors: a base rate and a per-mile rate. Base rates largely depend on the state you live in, your car’s make, model and year, your driving history and habits and the types of coverage you’ve selected on your policy. Then, you’ll pay a few cents for each mile you drive on top of that base rate.  

How does pay-per-mile car insurance work? 

Pay-per-mile car insurance tracks the mileage you drive either with a mobile app or with a transmitter plugged into the diagnostic port of your car beneath the steering column.  

The system tracks the number of miles you drive and shares that data with your insurance company. It’s worth noting, however, that these devices can sometimes transmit more information than simply how many miles you drive — some can also share data on the time of day you drive, speed habits and braking tendencies. Make sure to research any companies you’re considering to fully understand what data will be shared.  

The difference between pay-per-mile insurance and driving-based or usage-based insurance is that pay-per-mile focuses on the number of miles driven, while driving-based and usage-based policies measure driving habits and reward safer drivers with lower premiums.

Is pay-per-mile car insurance worth it? 

In some cases, pay-per-mile car insurance can be useful for lowering rates. There are several scenarios where this type of car insurance can make sense.  

There are a few pros and cons you should think through when considering whether it’s right for you.  

Pros of pay-per-mile car insurance 

Pay-per-mile car insurance has some obvious advantages, namely:  

  • Cheaper car insurance. Pay-per-mile car insurance bases your premium largely on the amount of driving you do. For those who don’t drive every day, this type of car insurance could link the amount of driving you do to your car insurance price, which could lower premiums.  

Cons of pay-per-mile car insurance 

In some cases, pay-per-mile car insurance doesn’t make sense. Here are a few common scenarios that could make it smarter to look for a standard car insurance policy:  

  • It’s not available in all states. Not all companies operate pay-per-mile car insurance programs in all U.S. states.  
  • It’s not available for all cars. Not all programs are compatible with all cars. Nationwide, for example, states that their SmartMiles program isn’t available for vehicles manufactured before 1996, and some hybrids and diesel cars and trucks may not be compatible.  
  • Data collection is a tradeoff for privacy. Though it could lower your premium, you’ll also be giving up some of your privacy since the device can track information about your driving.  

Best pay-per-mile car insurance 

Not many insurers offer pay-per-mile car insurance. If you’ve decided that pay-per-mile car insurance is right for you, consider these three companies that stood out for their average costs, coverage types, availability of coverage and customer satisfaction ratings.

Best overall  

SmartMiles® by Nationwide

  • Cost

    The best way to estimate your costs is to request a quote

  • App available

  • Policy highlights

    SmartMiles® is one of the more widely available pay-per-mile auto insurance options. It offers affordable coverage by the mile, tracked through a device plugged into your vehicle or through your vehicle’s existing system for some models. For those who road trip often, only the first 250 miles of driving per day count towards mileage.


  • Available in 44 states
  • Road trip exception included


  • Not available in all states

SmartMiles by Nationwide offers the same strong coverage that the company is known for — after all, Nationwide was one of our top picks for traditional car insurance. With this pay-per-mile car insurance, base premiums and per-mile costs don’t fluctuate over the course of the policy term, unless you make changes. Nationwide also offers a discount of up to 10% for safe driving after your first renewal.  


Milewise® from Allstate

  • Cost

    The best way to estimate your costs is to request a quote

  • App available

  • Policy highlights

    Allstate’s pay-per-mile program works through a device and a compatible app that can track driving miles, plus information like time of day, location, and speed. It’s available in 21 states, and has a road trip cap at 250 miles per day (or 150 miles per day in Oregon, Illlinois, Indiana, Ohio and New Jersey).


  • Road trip exclusion included
  • Allstate is rated highly for customer satisfaction by J.D. Power


  • Not available in all states

Milewise from Allstate is truly pay-per-mile car insurance — with this plan, your premium is paid after each trip with an account funded from a credit card on file. Users can track their daily costs, mileage cost and miles driven through an app. Rates can fluctuate based on your driving behavior in some states, which could increase or decrease your premium depending on your driving.  

Best for discounts 

Metromile Auto Insurance

  • Cost

    The best way to estimate your costs is to request a quote

  • App available

  • Policy highlights

    Metromile’s auto insurance offers coverage in eight states and is backed by Lemonade. Metromile offers discounts for insuring multiple cars and discounts for bundling policies, and a discount of up to 15% for using its Ride Along program, which tracks driving for 17 days before calculating a rate.


  • Only available in Washington, California, Oregon, Illinois, Arizona, Virginia, Pennsylvania and New Jersey

Metromile is a subsidiary of the insurance company Lemonade, which has also been one of our top picks for homeowners insurance and renters insurance. It offers discounts for bundling these policies and offers a discount for insuring multiple cars. Metromile also offers a potential discount of up to 15% off based on your driving habits through its Ride Along program.  

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Bottom line

Pay-per-mile car insurance can help some people who don’t drive much save on their car insurance. However, it involves a method of tracking mileage, like a transmitter that plugs into your car, and it isn’t available in every state.

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Why trust CNBC Select?

At CNBC Select, our mission is to provide our readers with high-quality service journalism and comprehensive consumer advice so they can make informed decisions with their money. Every pay-per-mile car insurance review is based on rigorous reporting by our team of expert writers and editors with extensive knowledge of car insurance products. While CNBC Select earns a commission from affiliate partners on many offers and links, we create all our content without input from our commercial team or any outside third parties, and we pride ourselves on our journalistic standards and ethics. See our methodology for more information on how we choose the best car insurance.

Our methodology

Editorial Note: Opinions, analyses, reviews or recommendations expressed in this article are those of the Select editorial staff’s alone, and have not been reviewed, approved or otherwise endorsed by any third party.


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