The average American driver spent $2,697 on car insurance annually last year, an increase of about 12% from 2024, according to data from Bankrate. This price can feel especially high when you only drive a few miles per week.
For those who work from home, use other modes of transit or are retired, finding car insurance that fits your budget and your lifestyle is important. And there are policies that can help low-mileage drivers reduce their car insurance costs, including pay-per-mile car insurance and usage-based insurance, also called telematics programs.
Here’s what you need to know about car insurance for low-mileage drivers, including our top policy picks for those who don’t spend much time behind the wheel. (See our methodology for more on how we made our selections.)
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Best car insurance for low-mileage drivers
Best for privacy: Mile Auto
Who’s this for? Most pay-per-mile car insurance plans require you to run an app on your phone when you drive or install a device in your car that tracks your mileage and driving information. Mile Auto doesn’t use those methods and instead asks drivers to snap a picture of their odometer and upload it once a month.
Standout benefits: Mile Auto offers full coverage car insurance, so you’d also be covered if your car is damaged by something other than a collision.
Mile Auto
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Cost
Get a rate estimate online or request a quote from an agent.
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App available
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Policy highlights
Mile Auto offers liability, collision and comprehensive insurance, as well as optional personal injury protection, MedPay, rental vehicle reimbursement and roadside assistance. Users submit a snapshot of the odometer each month to verify mileage.
Pros
- Doesn’t require app or telematics device
- Lower rates than other pay-per-mile insurers
Cons
- Only available in a few states
- Limited online features
- No discounts
- Deposit may be required
Best for work-from-home professionals: Geico
Who’s this for? On top of already affordable rates for drivers with lower mileage, Geico‘s DriveEasy program can help you earn a discount when you renew your policy, based on factors including low mileage.
Standout benefits: Geico also offers discounts to customers who are members of one of the more than 800 participating alumni groups and professional organizations.
Geico Auto Insurance
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Policy highlights
Accident forgiveness after 5 years. Add-ons include roadside assistance, rental car reimbursement and mechanical breakdown insurance.
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Discounts
16, including multi-car, safety/security systems, bundling, new car, clean driving record, defensive driver, military, homeownership and autopay.
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Availability
Geico auto insurance is available in all 50 U.S. states and Washington, D.C.
Pros
- Lower average rates for most drivers
- Can easily purchase and manage policy online
- Mechanical breakdown insurance
- Policies are available nationwide
Cons
- No gap insurance
- Few branches for in-person services
- Ranks below average for customer service and claims on J.D. Power surveys
Best for safe drivers: Nationwide
Who’s this for? Nationwide’s SmartRide program offers discounts of up to 40% to safe drivers who enroll and install the app on a smartphone. The program tracks your mileage, braking and acceleration, idle time and nighttime driving to help you earn discounts at your next policy renewal.
Standout benefits: Nationwide won’t use your data to raise your rates after you participate in the program.
SmartMiles® by Nationwide
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Cost
The best way to estimate your costs is to request a quote
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App available
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Policy highlights
SmartMiles® is the most widely available pay-per-mile auto insurance, available in 44 states. Mileage is tracked through a device plugged into your vehicle or through your vehicle’s existing system. If you take road trips, only the first 250 miles of driving per day count towards mileage.
Pros
- Available in 44 states
- 250-mile road trip exception
- Can save up to 30% according to Nationwide
Cons
- Not available in all states
- Your driving data is tracked
Best for city dwellers: Lemonade
Who’s this for? If you’re buying bus or train tickets more than you pay for parking, Lemonade might be a great fit. Lemonade’s auto insurance is only available in 10 states, but that footprint covers cities like Chicago, Los Angeles, San Francisco, Phoenix, Dallas, Seattle, Houston and Portland, to name a few.
Standout benefits: If you rent an apartment or own a home, consider bundling other insurance policies to save. Lemonade’s renters insurance, condo insurance and homeowners insurance is typically affordable and available quickly.
Lemonade Auto Insurance
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Cost
The best way to estimate your costs is to request a quote
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App available
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Policy highlights
Lemonade offers coverage for a variety of scenarios, including: car crashes, highway stalls, damage from fire, vandalism and weather, damaged glass and windshield, if you’re sued for liability and if your car gets stolen
Best for military members and veterans: USAA
Who’s this for? USAA is only available to U.S. military members, veterans and their families. But if you drive fewer than 8,000 miles per year, the SafePilot Miles program offers up to a 20% discount at your policy renewal.
Standout benefits: USAA offers discounts for a variety of situations, including some for insuring multiple vehicles and owning a vehicle that is less than three years old.
USAA Auto Insurance SafePilot Miles Program
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Cost
The best way to estimate your costs is to request a quote
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App available
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Policy highlights
USAA’s usage-based auto insurance policy offers new enrollees to save 20% off their premium for driving fewer miles and a discount of up to 20% for safe driving after their first renewal.
Pros
- Quotes available online
- Easy-to-use mobile app
- Costs won’t exceed a specified limit for the first six months in some states
Cons
- Not available in Alaska, California, Connecticut, Maryland, Michigan, New Jersey, New York, North Carolina, Pennsylvania, Vermont, and Washington state
- Limited to active military, veterans and their family
- Rate may be determined by driving habits
What is pay-per-mile car insurance?
Pay-per-mile car insurance bases your premium in part on how much you drive. So, the less you drive, the more you save.
Pay-per-mile car insurance has two factors: a daily or monthly base fee plus afew centsper mile. The daily or monthly base fee is based on the same factors as other car insurance policies, including your driving record and credit-based insurance score. Your per-mile rate — typically afew centsper mile — is then multiplied by the number of miles you drove in a month and added to your base rate.
That means pay-per-mile car insurance prices can fluctuate month to month. While you can trim costs — some estimates report customers saving up to 40% versus traditional insurance — you could see a big bill in a month when you need to drive a lot.
Typically, the people who see the most benefit from pay-per-mile car insurance are those who drive 8,000 to 10,000 miles per year or fewer. However, these programs aren’t available from every insurer or in every state.
What is usage-based insurance?
Usage-based insurance uses a phone app or a device installed in your car to collect driving data. Many of these programs monitor factors like:
- Speed
- Phone usage
- The time of day you drive
- Acceleration and braking rates
- Cornering
- Annual miles driven
Rates are set in part based on this information, along with information that typically goes into auto insurance rates, such as your driving record.
These programs often offer a discount for signing up, but don’t recur when you renew.
If your driving habits raise red flags, like frequent hard acceleration or braking, or consistently driving at speeds above speed limits, you may also see your rates raised when you renew your policy. Some insurers, however, state that they won’t raise your rates based on your habits. Read the fine print of any usage-based telematics program you’re considering to find out if the data collected can raise your rates at renewal.
Low-mileage car insurance
Who qualifies for low-mileage car insurance?
Typically, those who drive fewer than 8,000 to 10,000 miles are the right fit for a telematics or pay-per-mile program.
Is pay-per-mile car insurance worth it?
If you’re driving fewer than 10,000 miles per year, a pay-per-mile car insurance plan could be the right fit. By using a base daily rate, plus a per-mile charge, this plan could weigh your premium more heavily on the number of miles you drive. However, the monthly premiums will vary based on how much you drive, which could change your bill price regularly.
What is the best pay-per-mile car insurance?
CNBC Select found that Nationwide, Mile Auto, Lemonade and USAA were the best pay-per-mile car insurance plans based on data usage, customer service and ease of use.
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Why trust CNBC Select?
At CNBC Select, our mission is to provide our readers with high-quality service journalism and comprehensive consumer advice so they can make informed decisions with their money. Every pay-per-mile car insurancereview is based on rigorous reporting by our team of expert writers and editors with extensive knowledge of car insuranceproducts.While CNBC Select earns a commission from affiliate partners on many offers and links, we create all our content without input from our commercial team or any outside third parties, and we pride ourselves on our journalistic standards and ethics. Seeour methodologyfor more information on how we choose the best car insurance.
Our methodology
To determine the best pay-per-mile car insurance companies,CNBC Selectlooked at various U.S. car insurance companies that offer this type of coverage.
When narrowing down and selecting the top pay-per-mile and usage-based insurers, we considered rates, coverage types, discounts, availability and customer satisfaction, using data from J.D. Power and the Better Business Bureau. We considered how the data was used, including whether insurers would raise rates based on collected data.
We sorted our top picks by the:
- Best for privacy: Mile Auto
- Best for work-from-home professionals: Geico
- Best for safe drivers: Nationwide
- Best for city dwellers: Lemonade
- Best for military members and veterans: USAA
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Editorial Note: Opinions, analyses, reviews or recommendations expressed in this article are those of the Select editorial staff’s alone, and have not been reviewed, approved or otherwise endorsed by any third party.
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