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Have You Ever Heard Of Pay-Per-Mile Car Insurance?

When the COVID-19 pandemic hit home in 2020, working from home became the new normal.

Gone were the days of commuting to the office, driving to meeting locations, picking up carpoolers. Without warning, America’s love affair with cars seemed, well, more like a romance that slowly ran out of gas.

Suddenly, auto insurers found themselves responding to increased demand for pay-per-mile programs. Insurance provider Allstate found that the number of cars utilizing its pay-per-mile program has increased six-fold in the past year. These types of programs allow drivers to pay only for the miles they put on the car each month instead of the usual flat rate insurance fee.

Photo: Shutterstock/Opat Suvi

Shifting How You Think About Car Insurance

Pay-per-mile auto insurance offers drivers an opportunity to save on their premiums. With this type of coverage, you’ll still receive the same coverage that a traditional insurance policy offers, but you’ll no longer pay your usual monthly premium; instead,  you’ll pay a small base rate and a per-mile charge for the miles you drive each month.

Much like a standard auto insurance policy, your new insurance will reflect some of the same underwriting factors such as age, vehicle, your location, driving record, and credit score. On average, pay-per-mile base charges hover around $20 a month and up, and the typical per-mile charge is only a few cents. Miles are generally measured by a small device, provided by your insurer, that you can plug into your vehicle’s diagnostic port near your steering wheel.

Pay-Per-Mile Insurance Providers

Some insurance companies offer discounts for low-mileage drivers, which is different from a true pay-per-mile insurance policy. The following agencies offer pay-per-mile programs; compare rates online to determine which program best fits your driving and budgetary needs.

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Nationwide SmartMiles | Per-mile rate:  4 to 10 cents

Nationwide’s SmartMiles, the most widely accessible of the pay-per-mile programs, is open to residents of 41 states. A traditional policy with unlimited mileage will generally cost about $133 per month; Nationwide estimates that the same driver logging approximately 500 miles a month would pay $95 a month with the SmartMiles program.

Mile Auto| Potential savings:  30% to 40% off standard car insurance rates

Currently, only four states offer the Mile Auto program:  Arizona, Georgia, Illinois, and Oregon. This program doesn’t require a mile tracking device; instead, you send the company a photo of your odometer at the end of the month to keep track of your miles. The miles are then added to your base rate using your per-mile rate.


Allstate Milewise | Base rate: as little as $20 per month

You can find the Allstate Insurance Milewise program in 19 states. As with other pay-per-mile programs, you install a small device in your car to track your miles, or you can use the Milewise mobile app to monitor your mileage.


Metromile| Factors in only base rate and mileage, not driving habits

Eight states offer Metromile:  Arizona, California, Illinois, New Jersey, Oregon, Pennsylvania, Virginia, and Washington. By plugging a wireless device into your vehicle’s port, you can easily track your miles. According to ValuePenguin, this program is a good fit for drivers who log about 12,000 miles a year or less.