4 Best Pay-As-You-Go Car Insurance Companies (2025)
Allstate, Nationwide, and Hugo are a few of the best companies offering pay-as-you-go car insurance.
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Pay-as-you-go car insurance premiums vary each month depending on how frequently and how many miles you drive your car. Your monthly premium will have two parts: an unchanging base rate and the variable portion.
Most pay-as-you-go insurers base the variable portion on your actual mileage each month. But some insurers calculate usage costs in other ways.
If you’re considering pay-as-you-go insurance, here’s what to know about how it works, which insurers offer it, and how to compare quotes to find the best price on coverage that meets your needs.
Quick Facts
Companies may also refer to pay-as-you-go car insurance as pay-per-mile or usage-based insurance.
Not all companies offer pay-as-you-go coverage. Instead, they may offer you a discount for driving less.
Pay-as-you-go insurers use standard car insurance rating factors like your driving record, credit history, age, gender, ZIP code, and more to determine your base rate and per-mile charge.
How pay-as-you-go car insurance works
Pay-as-you-go car insurance provides the same types of coverage as standard auto insurance policies.
You can get minimum coverage, which is your state’s required amount of liability insurance, or full coverage, which typically adds comprehensive and collision insurance to a basic policy. If you opt for collision and comprehensive, you’ll have a deductible.
When you enroll in pay-as-you-go car insurance, most insurers will consider common rating factors to set your rates. On top of a base rate, you’ll pay a per-mile amount that depends on the number of miles you drive each month. This is why companies often call this type of coverage pay-per-mile auto insurance.
Some insurers will also track your driving habits and reward safe driving with bigger savings.
How to get pay-as-you-go car insurance
You can buy a pay-as-you-go policy the same way you buy a standard car insurance policy. You can deal with an agent or broker, apply directly on an insurer’s website, or use an online comparison platform to compare quotes from multiple companies.
Best companies for pay-as-you-go car insurance
Our editorial team spent more than 350 hours developing the Insurify Quality (IQ) Score and scoring insurance companies. The IQ Score objectively analyzes and calculates a score for insurers using more than 15 crucial criteria. The team weighted criteria by importance to the consumer — factors such as customer reviews and affordability influence the score more than availability and third-party ratings.
We rate each company on a 1 to 10 scale based on five categories: financial ratings, customer satisfaction, affordability, customer support and transparency, and availability. Insurify updates ratings once a year or as more recent information becomes available.
- Third-party financial ratings: Insurify uses data from AM Best, S&P, Moody’s, and more to compare insurance companies’ credit and ability to pay out future claims.
- Customer satisfaction: To calculate this score, Insurify analyzed more than 55,000 customer reviews across 155 car insurance companies. We also consider third-party ratings from J.D. Power, the National Association of Insurance Commissioners, and Trustpilot.
- Affordability: Our data scientists analyzed more than 90 million real-time auto insurance rates from our partners across the U.S., as well as available discounts, to calculate an affordability score.
- Customer support and transparency: This measures coverage options, ease of claims filing, and the insurer's transparency surrounding discounts, coverages, and claims process.
- Availability and reach: Insurify scores availability and reach by identifying the number of states in which insurers offer coverage and company size by market share.
Best overall pay-as-you-go car insurance: Allstate Milewise
Best for availability: Nationwide SmartMiles
Best for minimum coverage: Hugo
Best for ease of use: Mile Auto
To choose the best pay-as-you-go car insurance companies, Insurify’s editors and analysts consider:
Average rates (according to our proprietary database of millions of car insurance quotes)
Availability
Whether a company offers discounts or optional coverages like roadside assistance
Industry ratings, such as from AM Best, J.D. Power, and the National Association of Insurance Commissioners
Online reviews from customers
Good to Know
If you're looking for short-term car insurance, pay-as-you-go might not be the best option. You can consider temporary car insurance from insurers like Seven or Hugo. Or, you can purchase a six-month policy from a standard insurer and cancel it early when you no longer need it. Just be aware some insurers charge fees for early cancelation.
Cost of pay-as-you-go car insurance
Several factors can affect your pay-as-you-go car insurance rates. Age, gender, driving history, credit history, state, ZIP code, and more are all factors insurers consider when setting rates.3
Generally, though, you can expect your monthly pay-as-you-go premium to include a base rate and a per-mile rate.
Here are the national average monthly rates for some top pay-as-you-go insurers, according to Insurify data.
Disclaimer: Table data sourced from real-time quotes from Insurify's 500+ partner insurance providers. Actual quotes may vary based on the policy buyer's unique driver profile.
Our editorial team spent more than 350 hours developing the Insurify Quality (IQ) Score and scoring insurance companies. The IQ Score objectively analyzes and calculates a score for insurers using more than 15 crucial criteria. The team weighted criteria by importance to the consumer — factors such as customer reviews and affordability influence the score more than availability and third-party ratings.
We rate each company on a 1 to 10 scale based on five categories: financial ratings, customer satisfaction, affordability, customer support and transparency, and availability. Insurify updates ratings once a year or as more recent information becomes available.
- Third-party financial ratings: Insurify uses data from AM Best, S&P, Moody’s, and more to compare insurance companies’ credit and ability to pay out future claims.
- Customer satisfaction: To calculate this score, Insurify analyzed more than 55,000 customer reviews across 155 car insurance companies. We also consider third-party ratings from J.D. Power, the National Association of Insurance Commissioners, and Trustpilot.
- Affordability: Our data scientists analyzed more than 90 million real-time auto insurance rates from our partners across the U.S., as well as available discounts, to calculate an affordability score.
- Customer support and transparency: This measures coverage options, ease of claims filing, and the insurer's transparency surrounding discounts, coverages, and claims process.
- Availability and reach: Insurify scores availability and reach by identifying the number of states in which insurers offer coverage and company size by market share.
Pros and cons of pay-as-you-go insurance
Pay-per-mile car insurance can help low-mileage and safe drivers save money. How much you save will depend on the company and your unique situation, but insurers with pay-per-mile offerings claim savings of 40% or more off standard car insurance rates.
But not everyone will see significant savings with pay-as-you-go insurance, so it’s important to weigh the pros and cons of the coverage before buying it.
Pros
Low-mileage drivers could see significant savings.
Some companies provide additional discounts for safe driving behaviors.
Coverages are generally the same as standard policies: liability and full coverage, with some options like roadside assistance.
Cons
You may need to install a telematics device in your vehicle.
Companies that track driving habits may increase rates for poor driving.
It’s not the cheapest option for people who drive 10,000 miles or more per year.
Who should consider pay-as-you-go car insurance
Pay-as-you-go insurance isn’t for everyone, but it may be a good choice for:
People who drive fewer than 10,000 miles per year
Students or the parents of students living away from home
People who work from home
Senior drivers, who typically log fewer miles than other age groups
Safe drivers who avoid hard braking, speeding, and other behaviors that can negatively affect rates
City dwellers who rely on public transportation but still need car insurance
Multiple-vehicle owners who have one car they rarely use
Usage-based insurance (UBI) vs. pay-as-you-go
Pay-as-you-go or pay-per-mile insurance is a type of usage-based insurance (UBI), which bases your rates on how, when, and how much you use your vehicles.4 Pay-as-you-go insurance usually ties your variable rate to the number of miles you drive in a month.
Other types of UBI may also factor in when and where you drive, how you drive, and even if your vehicle’s technology reports a collision warning or airbag deployment. UBI programs also typically require a telematics device to monitor your driving, while some pay-as-you-go policies require only a mobile app or user-reported mileage.5
Pay-as-you-go car insurance FAQs
If you’re considering pay-as-you-go coverage as an option to lower your insurance costs, here are answers to some commonly asked questions that could help.
Is pay-as-you-go insurance legit?
Yes. Several insurance companies sell pay-as-you-go insurance, with minimum and full-coverage offerings. Pay-as-you-go coverage typically bases your premiums on a base rate and an additional per-mile rate.
How does pay-as-you-go car insurance work?
Pay-as-you-go car insurance bases your monthly car insurance premium on the number of miles you drive each month. In addition to a per-mile charge, you’ll also pay a base rate.
Because your rate will vary from month to month, you won’t prepay for your insurance each coming month. Instead, you pay for the previous month’s usage.
What is a low-mileage discount?
Not every standard insurer offers a pay-per-mile product. But many that don’t have pay-as-you-go programs offer discounts for policyholders who have low annual mileage or safe driving habits. For example, Progressive’s Snapshot UBI program adjusts your premium based on how, how much, and when you drive.
What variables does pay-as-you-go insurance measure?
Pay-as-you-go insurance uses the same rating factors as standard car insurance, such as age, gender, credit history, driving record, and more. All pay-as-you-go insurance measures how many miles you drive each month. Some insurers also measure your driving habits, such as hard braking or speeding.
Is pay-as-you-drive insurance worth it?
It depends. If you typically drive fewer than 10,000 miles per year and are a safe driver, pay-as-you-drive coverage could help you save money on car insurance costs.
But it’s not for high-mileage drivers and may not be the cheapest option for people with severe driving infractions, such as a DUI.
Which insurance companies offer pay-per-mile car insurance?
Allstate, Nationwide, and Mile Auto all offer pay-per-mile car insurance. You may find others, such as regional insurers, that also offer usage-based car insurance. Comparing quotes and getting advice from an agent can help you find the pay-per-mile policy that’s best for you.
Do you have to pay for car insurance before you get it?
Yes. You need to pay your initial premium before your car insurance goes into effect. Insurance companies don’t issue coverage prior to receiving payment.
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