Liberty Mutual, Nationwide, and AAA are the best pay-as-you-go auto insurance companies, offering wide availability and usage-based discounts of up to 40%. You may be able to find rates as low as $39 per month with pay-as-you-go car insurance if you put 10,000 miles or fewer on your car each year.
Best Pay-As-You-Go Car Insurance Companies
If you drive fewer miles than the average driver, traditional car insurance may not be the most cost-effective option. Pay-as-you-go car insurance can help low-mileage drivers reduce their premiums by pricing coverage around mileage, driving behavior, or both.
- Pay-as-you-go insurance is generally worth considering if you drive fewer than 8,000 miles per year.
- Nationwide SmartMiles is available in more states than many competing mileage-based programs.
- State Farm offers some of the lowest average rates among the major providers, starting around $43 per month in the rate data used for this guide.
Pay-as-you-go auto insurance can be particularly useful for people who work from home, retirees, occasional drivers, or anyone with a short commute. Depending on the insurer, your premium may be calculated using mileage alone or through telematics that monitor driving habits such as braking, acceleration, speed, and time of day.
Top 8 Companies for Pay-As-You-Go Auto Insurance
| Company | Rank | Claims Satisfaction | A.M. Best | Best For |
|---|---|---|---|---|
| Liberty Mutual | #1 | 730 / 1,000 | A | Claims Service |
| Nationwide | #2 | 729 / 1,000 | A+ | Low Mileage |
| AAA | #3 | 726 / 1,000 | A+ | Roadside Assistance |
| State Farm | #4 | 716 / 1,000 | A+ | Local Agents |
| American Family | #5 | 702 / 1,000 | A | Teen Drivers |
| Geico | #6 | 697 / 1,000 | A++ | Mobile Tools |
| Allstate | #7 | 693 / 1,000 | A+ | Higher Mileage |
| Progressive | #8 | 673 / 1,000 | A+ | Safe Drivers |
Most insurers use a mobile app, plug-in device, or another telematics method to measure mileage and driving behavior. However, some providers use less intrusive methods. For example, certain pay-per-mile insurers rely primarily on odometer readings rather than continuously tracking driving behavior.
Before choosing a policy, compare personalized quotes because availability, pricing, and program rules vary by state and driver.
Comparing Pay-As-You-Go Insurance Companies
Pay-as-you-go insurance, sometimes called pay-per-mile insurance or usage-based insurance (UBI), allows insurers to calculate premiums partly around how much or how safely you drive.
Traditional insurance typically relies heavily on factors such as age, location, vehicle, driving record, and coverage level. Pay-as-you-go programs add mileage or driving behavior to the calculation.
There are two common types of pay-as-you-go coverage:
Pay-Per-Mile Insurance
Pay-per-mile insurance generally combines a base monthly charge with a separate rate for each mile driven.
For example, a policy might charge a fixed monthly amount plus a few cents for every mile you drive. A person who drives 300 miles during the month would therefore pay less than someone driving 1,500 miles, assuming other factors remain the same.
Usage-Based Insurance
Usage-based insurance uses telematics to evaluate driving behavior. Depending on the provider, the program may monitor:
- Mileage
- Speed
- Hard braking
- Rapid acceleration
- Phone use
- Time of day
- Driving patterns
Good driving can result in a discount, while poor driving behavior may reduce savings or affect your premium with certain providers.
Average Costs for Pay-Per-Use Car Insurance
One of the biggest reasons drivers consider pay-as-you-go coverage is the potential for lower premiums.
However, there is no single price for pay-per-mile insurance. Your final rate can depend on your location, age, vehicle, driving record, coverage limits, deductible, mileage, and the specific program offered by the insurer.
Pay-As-You-Go Auto Insurance Monthly Rates by Coverage Level
| Insurance Company | Minimum Coverage | Full Coverage |
|---|---|---|
| AAA | $51 | $146 |
| Allstate | $52 | $143 |
| American Family | $54 | $151 |
| Geico | $47 | $138 |
| Liberty Mutual | $61 | $162 |
| Nationwide | $49 | $137 |
| Progressive | $53 | $148 |
| State Farm | $43 | $124 |
State Farm has the lowest average monthly rates among the major providers shown above, while Liberty Mutual has some of the highest. Drivers looking for full coverage should compare several companies because the cheapest provider for minimum coverage may not be the cheapest for full coverage.
How Age Affects Pay-As-You-Go Insurance Rates
Mileage is an important factor in pay-as-you-go insurance, but it does not completely replace traditional rating factors.
Age and driving experience can still influence your base premium. Younger drivers generally pay higher rates because insurers consider them a higher-risk group.
Pay-as-you-go coverage can nevertheless be useful for young drivers who do not drive frequently. A low-mileage policy may help offset some of the higher costs associated with age.
Older drivers and retirees can also benefit when they no longer commute every day. Someone who drives only for errands, appointments, and occasional trips may have a better opportunity to save through mileage-based coverage.
How Accidents, Tickets, and DUIs Affect Costs
Your driving record remains important even when you choose a mileage-based or usage-based policy.
A clean driving history generally results in lower premiums. Accidents, speeding tickets, and DUIs can significantly increase insurance costs.
Pay-As-You-Go Auto Insurance Monthly Rates by Driving Record
| Company | Clean Record | One Ticket | One Accident | One DUI |
|---|---|---|---|---|
| AAA | $51 | $61 | $84 | $134 |
| Allstate | $52 | $63 | $89 | $145 |
| American Family | $54 | $64 | $88 | $141 |
| Geico | $47 | $57 | $78 | $124 |
| Liberty Mutual | $61 | $74 | $105 | $173 |
| Nationwide | $49 | $58 | $80 | $128 |
| Progressive | $53 | $63 | $85 | $139 |
| State Farm | $43 | $51 | $69 | $108 |
The table shows how quickly premiums can rise after a violation or serious driving offense. Drivers with a poor record should compare multiple insurers rather than assuming a pay-as-you-go policy will automatically be cheaper.
How Pay-As-You-Go Insurance Varies by State
Pay-as-you-go auto insurance is not identical throughout the United States. State regulations, insurance laws, provider availability, and telematics rules can affect which programs are offered.
For example, mileage-based insurance in Texas may operate differently from similar coverage in California. Some states place additional restrictions on the type of driving information insurers can collect.
Your location also affects the underlying insurance rate. A low-mileage driver in one state may receive a very different quote from a driver with the same vehicle and mileage in another state.
Before buying a policy, verify that the specific pay-as-you-go program is available in your state.
Pay-As-You-Go Pricing From Different Insurers
Several insurers specialize in mileage-based or usage-based coverage, while others offer telematics as an optional program alongside traditional insurance.
Pay-As-You-Go Auto Insurance Monthly Rates by Provider
| Insurance Company | Minimum Coverage | Full Coverage |
|---|---|---|
| AAA | $51 | $146 |
| Allstate | $52 | $143 |
| American Family | $54 | $151 |
| Geico | $47 | $138 |
| Hugo | $46 | $131 |
| Liberty Mutual | $61 | $162 |
| Metromile | $42 | $119 |
| MileAuto | $39 | $115 |
| Nationwide | $49 | $137 |
| Noblr | $45 | $128 |
MileAuto has the lowest average monthly price in this comparison at $39. Its model is designed around mileage rather than using a plug-in device to continuously monitor driving behavior.
Hugo takes a different approach by allowing customers to prepay coverage through its app, while availability and policy terms depend on state regulations.
Pay-As-You-Go Insurance for Occasional Drivers
Pay-as-you-go insurance works particularly well for drivers who rarely use their vehicles. If you drive only a few miles each week, a mileage-based policy can potentially cost less than a conventional policy.
However, the savings can disappear for drivers who regularly travel long distances. Always estimate your annual mileage before switching.
How Pay-As-You-Go Car Insurance Works
The basic idea behind pay-as-you-go insurance is straightforward: your insurer uses mileage and/or driving behavior to determine part of your premium.
There are two common pricing methods.
Pay-Per-Mile Rate
You pay a base amount plus a charge for the miles you drive. The more miles you drive, the higher your monthly bill can become.
For example, if your base premium is $50 and your mileage charge is $0.04 per mile, driving 300 miles would result in:
$50 + ($0.04 × 300) = $62
Usage-Based Rate
A usage-based policy generally starts with a traditional premium and applies a discount based on driving behavior.
The insurer may collect information about:
- Mileage
- Speed
- Braking
- Acceleration
- Phone use
- Driving time
- Driving frequency
The exact data collected depends on the insurer and its telematics program.
Usage-Based Insurance vs. Pay-Per-Mile Insurance
Although these terms are sometimes used interchangeably, usage-based insurance and pay-per-mile insurance are not exactly the same.
| Feature | Usage-Based Insurance | Pay-Per-Mile Insurance |
|---|---|---|
| Mileage tracked | Yes | Yes |
| Driving behavior tracked | Usually | Usually no |
| Base premium | Yes | Yes |
| Per-mile charge | Usually no | Yes |
| Safe-driving discount | Common | Less common |
| Best for | Safe drivers | Low-mileage drivers |
Usage-based insurance focuses heavily on how you drive, while pay-per-mile insurance focuses primarily on how far you drive.
This distinction matters if you are concerned about privacy. A driver who wants mileage-based pricing without extensive behavioral tracking may prefer a true pay-per-mile policy.
Coverage Options for Pay-As-You-Go Drivers
Pay-as-you-go insurance generally provides the same core coverage types available through traditional auto insurance.
Depending on your state and insurer, you may be able to purchase:
- Bodily injury liability
- Property damage liability
- Collision coverage
- Comprehensive coverage
- Uninsured motorist coverage
- Underinsured motorist coverage
- Personal injury protection
- Medical payments coverage
Some providers also offer additional options such as rideshare coverage or gap insurance, although availability can be more limited with mileage-based policies.
Pay-As-You-Go Coverage Options by Provider
| Company | Claim Forgiveness | Gap Coverage | Reduced Deductible | Rideshare Coverage |
|---|---|---|---|---|
| AAA | Yes | Yes | Yes | Yes |
| Allstate | Yes | Yes | Yes | Yes |
| American Family | Yes | Yes | Yes | Yes |
| Geico | No | No | No | Yes |
| Liberty Mutual | Yes | Yes | Yes | Yes |
| Nationwide | No | Yes | Yes | No |
| Progressive | Yes | Yes | Yes | Yes |
| State Farm | Yes | No | No | Yes |
Coverage availability varies by state and policy, so review the actual policy details before purchasing.
Ways to Lower Pay-As-You-Go Insurance Rates
Mileage-based insurance can already reduce costs for occasional drivers, but additional discounts may make coverage even more affordable.
Bundle Your Insurance Policies
Combining auto insurance with homeowners, renters, condo, or other coverage can qualify you for a bundling discount.
Insure Multiple Vehicles
If you have more than one vehicle, ask whether the insurer provides a multi-car discount.
Increase Your Deductible
Choosing a higher deductible can lower your premium. However, make sure you can comfortably afford the deductible if you need to file a claim.
Review Your Coverage
As your vehicle gets older, review whether optional coverage still makes financial sense. Removing unnecessary coverage can reduce your premium, although you should never drop coverage without understanding the risks.
Compare Quotes Regularly
Insurance prices can change as your driving profile, vehicle, location, and insurer pricing change. Comparing quotes periodically can help you determine whether you still have a competitive rate.
Auto Insurance Discounts for Pay-As-You-Go Drivers
| Company | Anti-Theft | Bundling | Multi-Car | Usage-Based |
|---|---|---|---|---|
| AAA | 10% | 15% | 27% | 40% |
| Allstate | 10% | 25% | 10% | 30% |
| American Family | 25% | 25% | 23% | 15% |
| Geico | 25% | 25% | 25% | 25% |
| Liberty Mutual | 35% | 25% | 25% | 30% |
| Nationwide | 5% | 20% | 15% | 40% |
| Progressive | 25% | 10% | 12% | $231/year |
| State Farm | 15% | 17% | 20% | 20% |
Discount amounts can vary by state, eligibility, policy type, and program rules.
Who Should Use Pay-As-You-Go Insurance?
Pay-as-you-go insurance is not ideal for every driver.
It may be a strong option if you:
- Drive fewer than 8,000 miles annually
- Work from home
- Have a short commute
- Use public transportation frequently
- Are retired
- Drive mainly for errands
- Own a second vehicle that is rarely used
- Want mileage-based pricing
On the other hand, traditional insurance may be better if you drive long distances every day.
Drivers Who May Not Benefit
A pay-as-you-go policy may be less attractive if you:
- Have a long daily commute
- Frequently take road trips
- Drive hundreds of miles each week
- Dislike telematics tracking
- Need extensive optional coverage
- Frequently drive at night
- Have driving habits that could reduce a UBI discount
Before switching, calculate your expected monthly mileage and compare the total cost against conventional insurance.
Where to Buy Pay-As-You-Go Car Insurance
Several major insurers offer usage-based programs, while specialized companies focus specifically on mileage-based coverage.
State Farm, Geico, Progressive, Nationwide, and Allstate are among the larger insurers with telematics or mileage-related programs.
Allstate, for example, offers Milewise for mileage-based insurance and Drivewise for driving-based discounts. Nationwide also offers mileage and usage-based programs, although availability differs by state.
Smaller providers may offer more specialized pricing models, but they generally operate in fewer states.
Always check:
- Whether the program is available in your state.
- How mileage is measured.
- What driving behavior is tracked.
- Whether poor driving can increase your premium.
- Whether there is a mileage cap.
- What coverage options are available.
- Whether the quoted price includes all applicable fees.
#1 – Liberty Mutual: Best Overall
Liberty Mutual earns the top spot because of its strong claims satisfaction and substantial usage-based savings opportunities.
Pros
- Strong claims satisfaction score
- RightTrack provides usage-based savings
- Additional discounts may be available for qualifying drivers
- Wide range of insurance coverage options
- Useful for drivers interested in telematics discounts
Cons
- Average rates are higher than several competitors
- Poor driving behavior can affect savings
- Usage-based program availability varies by state
Liberty Mutual is a good choice for drivers who want a large insurer with a broad range of coverage options and are comfortable using a telematics program.
#2 – Nationwide: Best for Low-Mileage Drivers
Nationwide is one of the strongest choices for drivers who want mileage-based insurance.
Pros
- SmartMiles is designed for low-mileage drivers
- Daily mileage is capped at 250 miles
- Available in many states
- Multiple usage-based options
- Strong financial strength rating
Cons
- Initial rates may be higher than some competitors
- Discounts from certain programs can take time
- Availability varies by state
Nationwide is especially attractive for drivers who typically drive fewer miles but still want the flexibility to take occasional longer trips.
#3 – AAA: Best for Roadside Assistance
AAA combines usage-based insurance opportunities with its well-known roadside assistance services.
Pros
- Competitive usage-based discounts
- Strong claims satisfaction
- Roadside assistance included with eligible membership
- Mobile app allows driver-specific settings
- Useful for drivers who value roadside protection
Cons
- Membership fees increase the overall cost
- Availability varies by region
- Insurance products differ between AAA clubs
AAA can be a strong choice if roadside assistance is important to you and the available insurance program in your area offers competitive pricing.
#4 – State Farm: Best for Local Agents
State Farm is one of the most affordable major insurers in the comparison, with average rates starting around $43 per month.
Pros
- Low average monthly rates
- Local agents throughout the country
- Drive Safe & Save rewards safe driving
- No premium increase solely for poor telematics scores under the stated program rules
- Easy access to personalized assistance
Cons
- Program availability varies
- Coverage decisions can differ by state
- Some high-risk markets have experienced policy restrictions
State Farm is a particularly good fit for drivers who want low rates while still having access to a local insurance agent.
#5 – American Family: Best for Teen Drivers
American Family offers mileage and usage-based programs that can be useful for families with younger drivers.
Pros
- Mileage-based options for low-mileage drivers
- Driving-behavior programs encourage safer driving
- Potential savings for young drivers
- Multiple policy discounts may be available
Cons
- Available in fewer states than larger national insurers
- Rates are not always the cheapest
- Program availability varies by location
Families should compare American Family with other insurers before adding a teen to a policy because rates can differ substantially by driver profile.
#6 – Geico: Best for Mobile Tools
Geico is a strong option for drivers who prefer managing their policy digitally.
Pros
- User-friendly mobile tools
- DriveEasy can reward safe driving
- Excellent financial strength rating
- Convenient digital policy management
- Competitive overall rates
Cons
- Claims satisfaction is not among the highest on this list
- DriveEasy requires telematics participation
- Mileage-based options may vary by state
Geico is worth considering if you want a digitally focused insurance experience and are comfortable sharing driving data through a mobile program.
#7 – Allstate: Best for Higher-Mileage Drivers
Allstate offers multiple usage-based options, making it a flexible choice for drivers with different mileage and driving patterns.
Pros
- Milewise uses mileage-based pricing
- Daily mileage charge can be capped
- Drivewise rewards eligible safe-driving behavior
- Rewards program offers additional perks
- Multiple policy options
Cons
- Milewise availability is limited
- Poor driving behavior may reduce savings
- Pricing can vary considerably by driver and state
Allstate may work well for drivers who want to choose between mileage-based and driving-behavior-based insurance.
#8 – Progressive: Best for Safe Drivers
Progressive is another major insurer offering usage-based insurance through its Snapshot program.
Pros
- Snapshot rewards qualifying safe drivers
- Broad nationwide availability
- Multiple insurance coverage options
- Strong financial strength
- Useful digital tools
Cons
- Telematics can monitor driving behavior
- Poor driving habits may reduce discounts
- Usage-based savings vary by driver
- It may not be the cheapest option for every low-mileage driver
Progressive can be a good fit for drivers who are confident in their driving habits and want to earn savings through a telematics program.
Is Pay-As-You-Go Car Insurance Worth It?
Pay-as-you-go car insurance can be an excellent option for low-mileage drivers, but it is not automatically cheaper for everyone.
The biggest advantage is that your insurance cost can better reflect how much you actually drive. If you work remotely, rarely commute, or drive fewer than 8,000 miles a year, mileage-based coverage may provide meaningful savings.
However, drivers who regularly travel long distances may find traditional insurance more affordable.
Your best option depends on your:
- Annual mileage
- Driving record
- Age
- Location
- Vehicle
- Coverage requirements
- Driving habits
- Privacy preferences
The easiest way to determine whether pay-as-you-go coverage makes sense is to compare personalized quotes from multiple providers.
Final Thoughts on Pay-As-You-Go Auto Insurance
Pay-as-you-go auto insurance gives low-mileage drivers another way to control insurance costs. Some programs charge based primarily on mileage, while others use telematics to evaluate driving behavior and provide discounts.
MileAuto and other mileage-focused providers can be attractive for drivers who want to pay according to how far they drive, while companies such as State Farm, Nationwide, Progressive, Geico, and Allstate offer usage-based programs backed by larger national insurance networks.
Before purchasing coverage, compare the total monthly cost, coverage limits, mileage rules, privacy requirements, and available discounts. The cheapest policy is not necessarily the best policy if it does not provide the protection you need.
For most occasional drivers, the best strategy is to compare both pay-per-mile insurance and traditional car insurance quotes and choose the option that provides the right balance of price, coverage, and flexibility.