Pay-per-mile insurance prices your policy on how far you actually drive instead of an estimate.
How it works
- A low monthly base rate covers fixed risks like theft and weather.
- A per-mile rate, often a few cents, is added for the miles you drive.
- Mileage is tracked by a plug-in device or app.
Who saves the most
- Remote workers and homebodies
- People who mostly take transit or walk
- Households with a rarely driven second car
- Anyone under about 7,000 miles a year
Who should avoid it
- Long commuters and road-trippers
- Rideshare and delivery drivers
- High-mileage households
The takeaway
If you drive well below the 12,000-mile average, pay-per-mile can cut your premium meaningfully. Compare a full-year estimate against a traditional low-mileage policy before switching.