Best Pay-Per-Mile Car Insurance
Pay-per-mile insurance charges a daily base rate (typically $1 to $3 per vehicle per day) plus a per-mile rate (typically 4 to 10 cents per mile), with most carriers capping billed miles at 150 or 250 per day. For a sub-7,500-annual-mile driver, pay-per-mile usually beats a traditional full-coverage policy by 20 to 40 percent. For a 12,000-mile commuter, pay-per-mile is usually more expensive.
Our shortlist
| Carrier | Featured for | Why it fits | Caveat |
|---|---|---|---|
| Nationwide SmartMiles | Low-mileage driver with sub-7,500 annual miles | Daily base + per-mile rate; 250-mile daily cap. Pairs with the SmartRide discount program on separate vehicles. | Not available in every state; verify at bind. |
| Allstate Milewise | Allstate-affiliated household wanting pay-per-mile on a secondary vehicle | Daily base + per-mile rate, 150-mile daily cap. Captive-agent channel so a household bundle discount can offset the base. | Milewise is not available in all Allstate states; agent appointment required. |
| Lemonade Car (Metromile heritage) | Pay-per-mile shopper in AZ, OR, or WA | Direct inheritance of the Metromile pay-per-mile product. In-app tracking, strong digital experience. | B+ (Good) AM Best; 10-state auto footprint; pay-per-mile product currently in AZ/OR/WA. |
How to estimate whether pay-per-mile saves money
- Your current full-coverage annual premium divided by 12 is your monthly cost.
- Multiply the pay-per-mile base rate × 30 days = pay-per-mile base per month.
- Multiply your actual monthly miles × the per-mile rate = pay-per-mile mileage charge.
- Compare: monthly base + mileage charge vs current monthly premium. If pay-per-mile is 15 percent cheaper or more, switch. Otherwise, ask your current carrier for a low-mileage discount instead.
When a traditional low-mileage discount is better
Low-mileage discounts (filed by most mainstream carriers for sub-7,500 or sub-10,000 annual miles) apply to the full-coverage premium without tracking every trip and without a daily base-rate cap. If you drive 6,000 to 9,000 miles per year and your current carrier offers a 10 to 20 percent low-mileage discount, that is often simpler and comparable in cost to pay-per-mile.
How the three pay-per-mile products differ in practice
All pay-per-mile products share the base+per-mile structure, but the small print varies in ways that matter at bind:
| Dimension | Nationwide SmartMiles | Allstate Milewise | Lemonade Car |
|---|---|---|---|
| Daily cap | 250 miles | 150 miles | 250 miles (ex-Metromile standard) |
| Rate adjustment | At renewal based on billed miles and driving record | At renewal; tier shift if habitual sub-cap patterns change | At renewal; in-app behavior scoring influences next-term base |
| Device | Plug-in OBD-II device OR mobile-app pairing (newer vehicles) | Plug-in OBD-II device | Mobile app only; no OBD-II hardware |
| Coverage menu | Full mainstream menu (comp, collision, UM/UIM, PIP) | Full mainstream menu plus Allstate-household bundle discount | Standard menu; some endorsements limited to the Lemonade app ecosystem |
| State footprint | Available in ~40 states; verify at bind | Appointed-agent only; subset of Allstate states | Pay-per-mile product currently in AZ, OR, and WA |
| Financial strength | A+ Superior AM Best | A+ Superior AM Best | B+ (Good) AM Best |
Who pay-per-mile is NOT for
- 12,000+ annual miles. The daily cap means you will routinely pay as if you drove 150 or 250 miles even on days you drove 60. The flat-rate full-coverage policy wins. See best for high-mileage.
- Rideshare or delivery drivers. Pay-per-mile personal-auto policies typically exclude commercial use. If you drive for Uber, Lyft, DoorDash, or Instacart more than occasionally, you need a rideshare endorsement, not pay-per-mile. See best for rideshare.
- Multi-car households where only one car qualifies. Running one car on pay-per-mile and others on a mainstream policy at different carriers forgoes the multi-car and multi-policy discounts, which usually exceed the pay-per-mile savings. Keep the pay-per-mile and the mainstream policy at the same carrier when possible (Nationwide and Allstate both support this; Lemonade does not have mainstream auto).
- Shoppers in states where the product is unavailable. Pay-per-mile product availability is state-regulated and changes slowly. If none of the three above is approved in your state, the alternative is a low-mileage discount on a traditional policy.
Common questions
Does the daily cap mean I pay for miles I did not drive?
No. The cap limits how many miles you are billed for on any single day, not a minimum. If you drive 300 miles one day, you are billed for 150 (Milewise) or 250 (SmartMiles, Lemonade). If you drive 20 miles, you are billed for 20. The cap protects you on heavy-use days, not against light-use days.
What happens if I disconnect or disable the tracker?
The carrier typically assigns a default mileage rate (worst- case billing) for days where no data is received. Repeated disconnection or tampering is usually grounds for non-renewal. If you have a vehicle issue that affects the OBD-II port, call the carrier within 48 hours to document.
Can I switch mid-policy from flat-rate to pay-per-mile?
Usually not at the same carrier. Pay-per-mile is a distinct product with distinct underwriting, so switching typically means a new policy and a new effective date. Confirm the old policy cancels concurrently (not before) to avoid a lapse.
Does pay-per-mile report lapse differently?
No, lapse treatment is the same. Non-payment or policy cancellation shows up on your CLUE and LexisNexis reports the same way as a flat-rate policy. Set up EFT auto-pay from the first bill cycle.
Related reading
- Cheapest car insurance (ranked)
- Senior rates (low-mileage retirees)
- Nationwide review
- Lemonade Car review
Ready to shortlist? Quote two or three of the carriers above.
Compare car insurance quotesSources
- Nationwide, SmartMiles pay-per-mile insurance: daily base + per-mile rate; 250-mile daily cap.
- Allstate, Milewise pay-per-mile insurance: 150-mile daily cap; agent-channel bind.
- Lemonade, Lemonade Car (Metromile heritage pay-per-mile product; currently Arizona, Oregon, and Washington).
- MoneyGeek, Pay-per-mile car insurance.