Pay-as-you-go car insurance calculates a policyholder's premium based on how many miles they drive each month. The policyholder's mileage is tracked through a mobile app or device plugged into the vehicle, and customers who drive fewer miles pay a lower rate. Companies that offer pay-as-you-go car insurance, which can also be referred to as pay-per-mile or usage-based coverage, usually charge a monthly base rate and then add a fee for each mile driven.
Pay-as-You-Go Car Insurance Options
Nationwide SmartMiles
Allstate Milewise
Metromile
Other major insurers offer usage-based programs that give drivers a discounted rate based on various driving habits, including miles driven. If your annual mileage is lower than the average driver, you may also qualify for a low-mileage discount.
Who Should Consider Pay-as-You-Go Car Insurance
Pay-as-you-go car insurance is often a good investment for people who don't drive frequently, like students and seasonal workers. To learn more, check out WalletHub's guide to usage-based insurance.