Who offers the best pay-as-you-go car insurance?
The best car insurance companies provide pay-as-you-go car insurance, which can save you 25% on car insurance per year. Pay-as-you-drive auto insurance saves money because you drive your vehicle less than the average person.
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Tracey L. Wells
Licensed Insurance Agent & Agency Owner
Tracey L. Wells is a licensed insurance agent and Farmers insurance agency owner with 23 years of experience. He is proud to be a local Farmers agent serving Grayson, Georgia and surrounding areas. With experience as both an underwriter and agent, he provides his customers with insight that others agents may not have. His agency offers all lines of insurance including home, life, auto, RV, busi...
Licensed Insurance Agent & Agency Owner
UPDATED: Jan 9, 2024
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Our car insurance industry partnerships don’t influence our content. Our opinions are our own. To compare quotes from many different car insurance companies please enter your ZIP code on this page to use the free quote tool. The more quotes you compare, the more chances to save.
Editorial Guidelines: We are a free online resource for anyone interested in learning more about car insurance. Our goal is to be an objective, third-party resource for everything car insurance-related. We update our site regularly, and all content is reviewed by car insurance experts.
UPDATED: Jan 9, 2024
It’s all about you. We want to help you make the right coverage choices.
Advertiser Disclosure: We strive to help you make confident car insurance decisions. Comparison shopping should be easy. We are not affiliated with any one car insurance provider and cannot guarantee quotes from any single provider.
Our car insurance industry partnerships don’t influence our content. Our opinions are our own. To compare quotes from many different car insurance companies please enter your ZIP code on this page to use the free quote tool. The more quotes you compare, the more chances to save.
On This Page
- Pay-as-you-go insurance is a type of usage-based car insurance that’s available at different car insurance providers
- Another name for pay-as-you-go insurance is pay-per-mile insurance
- Pay-how-you-drive insurance works by monitoring your driving habits
- Usage-based auto insurance isn’t available in all 50 states
Pay-as-you-go car insurance is a reasonably new phenomenon, but it’s gaining in popularity as environmentally-conscious and budget-savvy drivers search for new ways to lower the cost of their insurance.
Who offers the best pay-as-you-go car insurance? Many insurers are now offering these programs, and they can be the right choice for some consumers.
If you drive infrequently, it might be worth considering a usage-based insurance policy that lets you buy insurance by the mile.
What are the best pay-as-you-go insurance companies? Where can I find cheap pay-as-you-go car insurance?
Different companies handle the policies differently, so it’s worth investigating individual insurers before choosing the best company for your affordable car insurance policy.
Before learning about the best pay-as-you-go car insurance companies, compare great pay-as-you-go car insurance quotes for usage-based insurance policies in your area now by entering your ZIP code into our free tool above.
Who offers the best pay-as-you-go car insurance?
Which top brands offer pay-as-you-go car insurance? Let’s look at a preview of car insurance discounts from the top companies with pay-as-you-go auto insurance.
Estimated Pay-As-You-Go Car Insurance Programs and Their Discounts
| Pay As You Go Programs | Car Insurance Savings |
|---|---|
| Allstate Drivewise | Average discount is between 10% and 25%. |
| Esurance DriveSense | Depends on the state where you live. |
| Geico DriveEasy | Depends on the state where you live. |
| Liberty Mutual RightTrack | Average of 5 to 30% |
| Metromile | $611 or a maximum of 50% |
| Nationwide SmartRide | Up to 40% |
| Progressive Snapshot | $130 on average |
| Root | Maximum savings is $900/yr or 70% |
| State Farm Drive Safe & Save | 15% savings |
See how the savings vary. Some of these usage-based insurance programs aren’t available in your state. You’ll need to ask an agent or the car insurance company if each usage-based auto insurance program is available in your state. But it would help if you still learned more about it.
Let’s examine a quick summary of pay-as-you-go car insurance.
Pay-As-You-Go Car Insurance Summary
| Insurance Facts | Details | From The Experts |
|---|---|---|
| Number of Auto Accidents in 2017 | 6,452,000 | nhtsa.gov |
| Number of Miles Driven in the US in 2016 | 3.22 Trillion | npr.org |
| Most Expensive Insurance by State | Louisiana - $1,443.72 | iii.org |
| Least Expensive Insurance by State | Vermont - $762.59 | iii.org |
| Number of Drivers With Usage-Based Insurance in the US | 3 million | edmunds.com |
If you’re looking to compare pay-as-you-go auto insurance, continue reading this guide to learn more details about car insurance companies with a pay-as-you-go program that provides usage-based policies with different benefits.
Progressive Insurance
Can you get pay-as-you-go car insurance through Progressive? The company does not offer this product as of this writing, but they have a smart app available.
One of the first insurance companies to introduce usage-based insurance, Progressive calls the program a “Snapshot Program.” Their telematics device works with any vehicle manufactured after 1996. The maximum discount available for drivers is 25 percent.
Liberty Mutual Insurance
Does Liberty Mutual offer pay-as-you-go or mobile car insurance? Not at this time, but they do have a smart app available:
Their usage-based program, “Onboard Advisor,” is primarily targeted at commercial lines. It’s mainly used to monitor the behavior of fleet drivers and maximize profits in those policies.
Private auto versions may soon be available, however, so it’s worth asking about if you already have a Liberty Mutual insurance policy. Read more about Liberty Mutual in our Liberty Mutual car insurance review.
GMAC Insurance
The GMAC/OnStar discount program for safe drivers is slightly different from the one offered by other companies.
Instead of using a separate telematics plug-in, GMAC utilizes OnStar technology to record a driver’s behaviors. The program only records mileage, not other behaviors, but discounts can be as high as 26% for qualifying members.
Allstate Insurance
Working out the specifics of which plan is best isn’t always easy, but the Allstate safe driving app does offer one of the larger discounts among the major insurance companies.
Does Allstate have affordable pay-as-you-go car insurance? Allstate usage-based insurance comes in second only to State Farm.
The “Drivewise” program is Allstate’s usage-based insurance, and it functions in a very similar way to Progressive’s policy. It utilizes a similar device and records the same information. Drivers can save up to 30% by enrolling in Drivewise.
State Farm Insurance
How big is State Farm car insurance? Pretty big, and, like the other companies mentioned above, State Farm Insurance offers a smart driving app rather than a pay-as-you-go plan. They do, however, provide a substantial discount for safe drivers.
Called “Drive Safe and Save,” State Farm’s usage-based insurance discount functions similarly to Allstate and Progressive, and some customers can save as much as 50% on their car insurance.
Not all pay-as-you-go insurance policies are available in all states. Some insurers have only made the product available in certain areas as a test pilot, so you should always check with the insurer to make sure you can qualify.
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How does pay-as-you-go car insurance work?
There are two types of coverage lumped together under usage-based insurance.
The first is pay-as-you-go coverage, which is insurance rates charged by each mile driven. There are smart driving apps, which are essentially coverage rates based on a driver’s habits, or pay-how-you-drive coverage.
People who frequently drive, drive during peak traffic hours, or engage in high-risk behaviors have a higher risk of being in accidents than individuals who do not.
To reward drivers who reduce their risk by driving less frequently, insurance companies offer coverage that charges rates based on their actual behavior.
According to IIHS, usage-based apps are just one of the many technological advances available to modern drivers. Rearview cameras, lane departure warnings, and other crash avoidance technologies help drivers avoid dangerous situations and keep their insurance costs low.
Pay-As-You-Go Car Insurance Summary
| Insurance Facts | Details | From The Experts |
|---|---|---|
| Number of Auto Accidents in 2017 | 6,452,000 | nhtsa.gov |
| Number of Miles Driven in the US in 2016 | 3.22 Trillion | npr.org |
| Most Expensive Insurance by State | Louisiana - $1,443.72 | iii.org |
| Least Expensive Insurance by State | Vermont - $762.59 | iii.org |
| Number of Drivers With Usage-Based Insurance in the US | 3 million | edmunds.com |
Unlike rearview cameras and lane departure warnings, however, usage-based insurance apps can increase your premiums if your insurance company determines that your driving behavior is unsafe.
What are the differences between pay-as-you-drive vs. pay-how-you-drive?
There are two types of usage-based car insurance policies:
- Specialty insurance companies like Metromile generally offer Pay-as-you-drive policies. These companies typically charge a low monthly base rate and a per-mile surcharge.
- Pay-how-you-drive and smart apps (otherwise known as pay-how-you-drive apps) provide discounted policies based on your driving behavior.
These behaviors put drivers at risk of being involved in collisions.
Individuals who drive less have a lower risk of being in accidents than those who drive a lot. Typically, insurance companies account for reduced mileage by rating drivers in two categories, as shown in the chart below.
Average Annual Car Insurance Rates by Commute
| Companies | Average Annual Rates for 10 Miles Commute 6,000 Annual Mileage | Average Annual Rates for 25 Miles Commute 12,000 Annual Mileage | Average Annual Car Insurance Rates |
|---|---|---|---|
| USAA | $2,482.69 | $2,591.91 | $2,537.30 |
| Geico | $3,162.64 | $3,267.37 | $3,215.01 |
| State Farm | $3,175.98 | $3,344.01 | $3,260.00 |
| American Family | $3,401.30 | $3,484.88 | $3,443.09 |
| Nationwide | $3,437.33 | $3,462.67 | $3,450.00 |
| Progressive | $4,030.02 | $4,041.01 | $4,035.52 |
| Farmers | $4,179.32 | $4,209.22 | $4,194.27 |
| Travelers | $4,399.85 | $4,469.96 | $4,434.91 |
| Allstate | $4,841.71 | $4,934.20 | $4,887.95 |
| Liberty Mutual | $5,995.27 | $6,151.63 | $6,073.45 |
Usage-based car insurance programs that monitor your driving behavior for savings are known as pay-how-you-drive (PHYD) car insurance.
When determining your rates, car insurance companies assume certain basic behaviors. They think that drivers will put an average of 10,000 miles on their cars each year and that most drivers commute to work during peak traffic hours.
How does pay-per-mile car insurance work?
Usually, car insurance mileage is calculated in a range, but pay-as-you-go plans charge you on a per-mile basis.
This could be an excellent option for people with cars driven less than 25 miles a day.
However, don’t automatically assume that the per-mile car insurance is a cheaper option. It is essential to get multiple quotes to make sure you are getting the lowest possible rate.
Smartphone apps are optional features on most standard insurance policies that allow your insurance company to track your driving behavior and charge you according to your risk level.
This could mean that your insurance rates will go down, but for some drivers, this could end up increasing their rates.
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What is usage-based car insurance?
Usage-based car insurance monitors a driver’s habits and modifies costs accordingly.
This means that drivers’ rates will change from one month to the next as their driving habits change. It also means that the insurance company needs to monitor an insured’s driving habits.
To do this, the insurance company will install a device into the insured’s vehicle.
This device monitors the miles driven, the time of day they were driven, and how the insured behaved, like turning quickly or braking suddenly. The device then reports this data back to the insurance company, which determines the rates for the month.
Below is a chart of the average annual premium for several major insurance companies. Keep in mind that several factors determine auto insurance rates.
For example, the average insurance rate for a medium sedan was $1,251 in 2019. The rates below are based on a nationwide average, so rates in your state may vary:
Average Annual Car Insurance Rates by Company
| Companies | Average Annual Car Insurance Rates |
|---|---|
| USAA | $2,541.91 |
| Geico | $3,216.39 |
| State Farm | $3,267.63 |
| American Family | $3,443.09 |
| Nationwide | $3,446.70 |
| Average | $3,958.70 |
| Progressive | $4,043.83 |
| Farmers | $4,188.80 |
| Travelers | $4,444.85 |
| Allstate | $4,898.25 |
| Liberty Mutual | $6,095.54 |
Of course, the device cannot get an accurate idea of a driver’s entire driving habits by focusing on such limited behaviors, but it can better understand the person’s risk.
The people who benefit from these programs drive primarily for pleasure and avoid commuting during rush hour. Efficient drivers with low mileage and off-peak driving hours can often get a dramatically lower premium by using a pay-as-you-go program.
Should I get a pay-as-you-go car insurance policy?
Are you looking to buy pay-as-you-go car insurance? Of course, to get the maximum discount from any insurance company, a customer must meet the mileage and behavior requirements.
It’s important to ask the insurance company how rates are calculated and whether you would be a good candidate for a pay-as-you-go insurance policy.
In some cases, a person’s rates could go up once the device is installed, although this is not the norm.
Other insurance companies that do not offer a driving-monitoring system may still provide you a discount if you have low mileage.
Do I have to buy car insurance if I only drive occasionally? If you utilize public transportation, work from home, or only drive sometimes, you can explain this to your insurance company and provide odometer readings.
You may be able to get a one-time discount that can lower the cost of your insurance without needing to submit to a behavior-monitoring program.
Case Studies: Pay-As-You-Go Car Insurance
Case Study 1: Sarah – Low-Mileage Driver
Sarah, a remote worker, rarely uses her car and was paying a high premium for traditional car insurance. She switched to a pay-as-you-go policy, paying only for the miles she drives.
A tracking device records her mileage, and her premium is calculated accordingly. By switching, Sarah saved around 30% on her annual premium, aligning with her low-mileage driving habits.
Case Study 2: Mark – Safe Driver
Mark, a responsible driver with a clean record, sought a car insurance policy that rewarded his safe driving behavior. He enrolled in a usage-based insurance program, using a telematics device to monitor his driving habits.
Due to his safe driving, Mark received a significant discount of approximately 25% on his annual premium compared to traditional policies.
Case Study 3: Lisa – Occasional Driver
Lisa, a college student, rarely used her car and found traditional car insurance policies unsuitable. She discovered pay-per-mile car insurance designed for infrequent drivers. Lisa switched to this policy, tracking her mileage with a provided device, and her premium was adjusted accordingly.
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The Bottom Line: Who offers the best pay-as-you-go car insurance?
So, who provides affordable pay-as-you-go insurance? Only you know what works best for your needs.
As usage-based insurance grows in popularity, more insurance companies will begin offering it. Time will tell whether the deep discounts will continue for drivers. Auto insurance companies with a pay-as-you-go program are ahead of the game.
In the meantime, comparison shopping and carefully selecting the best insurer for your pay-and-go car insurance needs are the best way to ensure you get the best possible rates for the policy you need.
Want to compare insurance companies to find the best rates? Just enter your ZIP code into our free comparison tool to get started.
Frequently Asked Questions
What is pay-as-you-go car insurance?
Pay-as-you-go car insurance is a type of car insurance that allows drivers to pay for their coverage based on how much they drive. Rather than paying a fixed monthly or annual premium, drivers are charged based on the number of miles they drive.
Who offers pay-as-you-go car insurance?
Several insurance companies offer pay-as-you-go car insurance, including Metromile, Root, Nationwide, and Allstate. However, availability may vary by state.
How does pay-as-you-go car insurance work?
Pay-as-you-go car insurance typically involves installing a device in your car that tracks your mileage. Your insurance company will then use this information to determine how much you should be charged for coverage. You may also be charged based on other factors, such as your driving behavior or the time of day that you drive.
Is pay-as-you-go car insurance cheaper than traditional car insurance?
Pay-as-you-go car insurance can be cheaper than traditional car insurance for drivers who don’t drive very much or who drive only during off-peak hours. However, it may be more expensive for drivers who drive frequently or during peak hours.
What are the benefits of pay-as-you-go car insurance?
The benefits of pay-as-you-go car insurance include potentially lower costs for drivers who don’t drive very much or who drive during off-peak hours, as well as greater flexibility in how drivers pay for their car insurance.
Are there any downsides to pay-as-you-go car insurance?
One downside of pay-as-you-go car insurance is that it may be more expensive for drivers who drive frequently or during peak hours. Additionally, some drivers may not like the idea of having a device installed in their car to track their mileage.
How can I find the best pay-as-you-go car insurance?
To find the best pay-as-you-go car insurance, you should compare rates and coverage from multiple insurance companies. Be sure to read reviews and check the company’s reputation before making a decision. You should also consider the specific terms and conditions of each policy to ensure that it meets your needs.
Enter your ZIP code below to view companies that have cheap auto insurance rates.
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Tracey L. Wells
Licensed Insurance Agent & Agency Owner
Tracey L. Wells is a licensed insurance agent and Farmers insurance agency owner with 23 years of experience. He is proud to be a local Farmers agent serving Grayson, Georgia and surrounding areas. With experience as both an underwriter and agent, he provides his customers with insight that others agents may not have. His agency offers all lines of insurance including home, life, auto, RV, busi...
Licensed Insurance Agent & Agency Owner
Editorial Guidelines: We are a free online resource for anyone interested in learning more about car insurance. Our goal is to be an objective, third-party resource for everything car insurance-related. We update our site regularly, and all content is reviewed by car insurance experts.