Car insurance premiums have traditionally been calculated based on factors such as the value of your vehicle, your driving history, and where you live. More recently, some insurance companies have offered another alternative—pay-per-mile car insurance, based largely on how much you drive. This new way of calculating insurance premiums can favor drivers who are on the road less often. Here is how it works and how to know if it's right for you.

Key Takeaways

How Does Pay-Per-Mile Car Insurance Work?

With a pay-per-mile policy, drivers typically pay a base monthly or daily plu🌠s a charge for each mile they drive. Like traditional auto insurance, the base rate may factor in the driver's location, vehiꦡcle, and demographic information.

At Metromile, the base rate starts at $29 per month, followed by a fee of around 6 cents per mile you drive. Allstate offers per-mile coverage in select states. A typical policy might charge $1.50 per day and 6 cents per mile.

Pay-per-mile car insurance shouldn't be confused with what's often referred to as 澳洲幸꧙运5官方开奖结果体彩网:black box or telematics auto insurance, although there are some similarities. That 💦type of policy, which involves an app or device installed in your car, is partly based on the number of miles you drive but also factors in other driving behaviors, such as how fast you drive, how hard you brake, and the time of day you typically drive.

Pay-per-mile policies are available from many traditional auto insurance companies as well as insurers thౠat specialize in this market.

Who Should Get Pay-Per-Mile Car Insurance?

Generally speaking, consumers who drive infrequently or drive very short distances might benefit from switching to pay-per-mile insurance. That could inc🐓lude college students, retirees, people who work from home, or people who use public transportation for most of their travel.

People who own more than one car might also consider pay-per-mile insurance for vehicles they rarely drive. Pay-per-mile insurer Mile Auto suggests that if you drive fewer than 10,000 miles per year, you could benefit by switching over from a traditional car insurance policy.

Another alternative if you have a traditional auto policy and find you aren't driving much is to inquire about discounts. Some insurers will provide a discount if you drive less than a certain number of miles per year (usually between 8,000 and 10,000).