Pay-Per-Mile Car Insurance

Personalized Car Insurance by the Mile

The national average daily mileage for a driver is around 30 miles. If you regularly see this as an average, you’re in good shape insurance-wise. But, if you drive only a few miles, you may be spending more than you should by not having pay-per-mile car insurance.

A traditional auto insurance policy can cost a lot monthly or annually. If you’re driving your car under 30 miles in a day or 8,000 miles in a year, a per-mile policy can save you hundreds, if not thousands, when it comes to keeping your car insured. That excellent policy is pay-per-mile car insurance.

Pay-per-mile car insurance coverage insures you just as much as your traditional personal insurance would, except the amount you pay is partially based on how many miles you drive. That’s why pay-per-mile car insurance works better for drivers who don’t drive many miles since the less you drive, the lower your rates will be.

Pay-per-mile car insurance can also be called pay-per-mile, pay-by-mile car insurance, pay-as-you-go, or pay-as-you-drive car insurance. Here’s what you need to know about a pay-per-mile car insurance policy and whether or not you qualify as a low-mileage driver.

How Does Pay-Per-Mile Car Insurance Work?

Pay-per-car mile insurance includes all the coverage a traditional personal auto policy would –collision, comprehensive, and uninsured motorist. Roadside assistance and liability coverage are also included. While your auto coverage remains unchanged, how you’ll pay for it is drastically different.

Pay-per-mile car insurance typically requires a daily or monthly rate based on common car factors such as make, model, driver’s age, driving history, and credit score. –This is what’s known as the base rate.

In addition to the base rate, there are the actual per-mile payments. An average policyholder pays under a dollar for each mile they travel in a day to give you an idea of how much a mile can cost. This payment is made monthly, with each bill covering the previous month.

As you would expect, your pay depends on how much you drive. We’ll get into a couple of examples of what the numbers may look like since there is no average. These car insurance rates and premiums on their policy vary from customer to customer.

When would I save the most on a pay-per-mile car insurance policy?

Look at your odometer and not your watch. It’s not the amount of time you’re in your car but the number of miles you drive.

You can sit in traffic for an hour and a half, braking in bumper-to-bumper traffic, but the distance you’re traveling isn’t changing, just your speed. Remember, a pay-per-mile car insurance policy isn’t for the average driver commuting long distances daily.

Here’s a list of those who would save the most with a pay-per-mile car insurance policy:

Public transportation

With this policy, vehicle owners who often take public transportation to work or on errands would save more.

Work from home

Remote work has become commonplace, and personal vehicles remain in their driveways. Pay-per-mile insurance would be the best option when your car is not being driven.

Certain car leases

Some leasing companies have mileage restrictions with their rentals. The mileage limits may go hand in hand with this type of policy.

College students

College campuses are tightly knit together. Students may bring their cars but use them less. Walking to class may be the quicker option.

Older drivers or retirees

Older age groups rarely drive. Retirees with no work to commute to may only drive on the weekends. Since the car may still be in their name, they could cover it more economically with this policy.

How does pay-per-mile car insurance measure miles?

When on a pay-per-mile car insurance policy, your insurer must constantly know what your odometer reads at the end of every day or month.

Many traditional insurers install a device on the policyholder’s car that tracks their mileage and use. It can help keep a company in the loop about your safe driving habits, leading to discounts. Some devices track location, but that can be turned off.

We don’t use a device or telematics system for our drivers. Instead, we require policyholders to take a picture of their odometer and submit it monthly.

This is also a common practice, and it’s great if you don’t want to buy or have additional technology in your car. Again, you want to keep your insurer in the loop about your mileage constantly.

How Much Does Pay-Per-Mile Car Insurance Cost?

Because of the reduced risk of a driver not being on the road frequently, a pay-per-mile insurance policy is far cheaper than a full personal policy. The base and per-mile rates add up to your monthly premiums.

The formula methodology to remember for calculating your monthly policy costs is:

Base rate + (per-mile rate * miles per month) = total monthly cost

Let’s say that your monthly base rate is $28. Your per-mile rate is generally below a dollar amount– usually around 5 cents, truthfully. So, assume the per-mile rate is 5 cents. In that month, you drive a total of 250 miles.

If you get our calculator and plug in the base rate, per-mile rate, and miles per month in the formula above, it adds up to a monthly cost of $40.50.

That would be an annual policy cost of $486 –far less than the average of $1,200 it costs to keep your car fully insured. Additional coverage, like roadside assistance, can be added as an option.

What Other Factors Determine my Pay Per Mile Insurance Premium?

Your base rate will always be lower than a personal auto policy. Average rates have been reported to be as low as $24 and as high as $30 monthly. Insurers use various factors to determine your base and per-mile rates for quotes depending on the driver and their car.

Here’s what matters when it comes to your per-mile insurance cost:

• State of residence: Insurance rates vary from state to state. Most states put a mileage limit of 250 or 150 miles, depending on where you live. This means that if you go over 250 miles in one month, you won’t have to pay for each mile you go above.
• Car make and model: Insurers typically assign higher premiums for larger or luxury vehicles. If you don’t drive often, it helps ensure the car isn’t the latest make or model.
• Vehicle Safety features: You may be eligible for a premium reduction if your car has certain safety features. They are essential features for a car, like anti-lock brakes, airbags, and daytime lights.
• Credit score: A good credit score or history shows a degree of financial responsibility, which a policyholder must have. The insurer may even give you reduced rates as a result.
• Drivers Age: Retirees often opt for a pay-per-mile insurance policy since they put little mileage on their cars. Older drivers generally get lower rates since younger drivers pay the most on average for their auto insurance. A Young driver would start to see a reduction in rates when they turn 20. Sometimes, insurers will even consider your marital status when pricing quotes.

What are some additional ways I could save on my pay-per-mile car insurance?

You can use several methods to reduce your per-mile insurance rates. Being a safe driver will give you discounts on your premiums. Being a competent driver with good driving habits lowers per-mile premiums.

Become an innovative and efficient driver with good driving habits by:

Using the most direct route

Prioritize minimizing your mileage by taking the quickest route or shortcut(s) to all your destinations. The fewer miles there are, the cheaper the rates are and the more significant the discount.

Completing errands in one run

When you need to run to the grocery store, bank, or Target, try completing all your daily errands in one run. Multiple runs may increase your mileage and lead to a lower discount.

Working close to or at home

Drivers who get the most significant insurance discount work around five miles close to where they live. Working from home has become ordinary as well.

Carpooling and public transportation

Public transportation doesn’t add miles to your car. Carpooling with friends or coworkers is an alternative to save your car’s mileage for a discount.

Practice Safe Driving Habits

Safe driving can permanently save you both financially and physically. Insurance companies continue to monitor their policyholders' driving habits by the day. Continuing to be a safe driver may cause insurers to take notice and offer you discounts on your rates.

What are the pros and cons of pay-per-mile auto insurance coverage?

Pay-Per-Mile Auto Insurance Pros

Let’s compare the pros and cons of paying your car insurance by the mile.

The massive difference in price between per mile and personal vehicle insurance is evident with the discounts we’ve discussed. That is if you are a low-mileage driver.

A rule of thumb is that if your yearly mileage is less than 10,000, this policy wouldn’t be worth it. Drivers frequently taking road trips also would not be good candidates for pay-per-mile auto insurance. If you take a road trip, rent a car. Also, consider the 250-mile cap for the day as a benefit.

Pay-Per-Mile Auto Insurance Cons

At the same time, you may not be a low-mileage driver. Spend the next week studying and keeping track of your mileage on your odometer and driving habits. Even though 10,000 miles is the point where it would cost you more, even 3,000 to 9,000 miles is a bit much. It helps if you drive a maximum of 2,500 miles annually.

You’ll also have to check which companies offer this policy in your state. Be aware that pay-per-mile insurance can be a temporary policy. If you were to get a new job further away or drive more, it might be time to invest in a traditional policy.

Being able to monitor your mileage without the use of a telematics tracking technology app is appealing to some customers. It’s not uncommon for customers to oppose a monitoring device being installed in their car and prefer just taking a picture of their odometer.

Taking a picture of your odometer at the bottom of your windshield at the end of every month is less personal and just as effective. More prominent corporate pay-per-mile insurance brands like Metromile or Allstate Milewise may require telematics systems to be installed and connected to a mobile app.

Is Pay-Per-Mile Insurance right for me?

Based on everything you now know about pay-per-mile auto insurance, you may have concluded that it’s the best move for you if you are a low-mileage driver.

Whenever you’re shopping for a new quote, weigh your options. Receive quotes from a couple of insurance companies to get an idea of pricing on your per-mile rates.

Remember to also keep an eye on what your personal policy quote includes and ensure it’s in the pay-per-mile auto insurance plan.

We work with Mile Auto. Mile Auto is to whom the policyholders send their monthly odometer pictures.

We pride ourselves on safe driving, customer privacy, and finding the most economical option for occasional drivers. Switch and Save Money with us and get insured today!

Contact an insurance agent today to find out more about Pay-Per-Mile Car Insurance.

Getting Pay-Per-Mile Insurance is Fast and Easy!

For a Pay Per Mile Car Insurance quote, call Insurance Navy today at 888-949-6289

Popular Locations we provide Pay-Per-Mile Insurance

• Pay-Per-Mile Car Insurance in Illinois

* This type of policy may only be available in some states; please call an agent for more information.