How Does Pay-Per-Mile Auto Insurance Work?

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How Does Pay-Per-Mile Auto Insurance Work?How does pay-per-mile auto insurance work?

When most people think of a fruit, it’s an apple. Mention Paris, and they’ll imagine the Eiffel Tower. And when you say car insurance, the vast majority of people will think of a standard plan. And that makes sense, because, for ages, car insurance plans were all basically the same, no matter your needs. But just like the weather and Lady Gaga’s outfits, the landscape is ever-changing. 

One type of coverage that has recently gained traction is pay-per-mile insurance, a type of car insurance policy where your rates are based upon how many miles you drive. These kinds of plans make the most sense for people who don’t drive very often or for people who are reconsidering how they drive. 

If you’re someone spending hours in your car each day, you’ll rack up wayyy too high a bill to make this sort of plan financially worth it. However, for people who don’t use their cars that often or who are perhaps looking to spend less — especially in the face of insurance hikes — pay-per-mile just might be for you. 

How do pay-per-mile plans work?

While it varies from company to company, most pay-per-mile policies work in relatively the same way: Customers pay a base amount each month, and then a variable rate on top of that based on the number of miles driven. So if you drive 50 miles one month and only 12 the next, you’ll pay two different amounts on your car insurance. It’s a bit like having a Zipcar membership, if that’s something you’ve had in the past. 

To track your mileage, most providers will ask you to install an app. If you’re uncomfortable giving your provider that sort of access, you may be able to send in a pic of your odometer each month instead. 

Is pay-per-mile right for me?

If we had the power to see into your financial future, we’d be living it up on the beaches of Bali. Which is all to say: whether to get pay-per-mile insurance depends on your unique circumstances and how much you use your car. You may benefit from pay-per-mile insurance if you:

  • Drive infrequently
  • Have a second vehicle you rarely use
  • Attend university and have left your car at home
  • Prefer to bus/bike/skateboard/scooter/literally anything but drive

Some people might want more traditional car insurance plans because they’ll always have a flat rate and can budget accordingly. All in all, it comes down to whether you drive a lot or not — because if you do, your rates with pay-per-mile will quickly begin to climb. 

And if you’re still not sure whether a pay-per-mile or more traditional car insurance policy makes sense for you, why not do a deeper dive? With Marble, you can shop for policies, compare quotes, and keep everything organized in one digital wallet — all while earning rewards. Sign up today!