What Is Car Insurance by the Mile?

You may have heard of pay-per-mile car insurance—an option some companies offer where your premium is based mostly on how many miles you drive. It’s often marketed to people who don’t spend much time behind the wheel and want a way to lower their costs.

While GEICO doesn’t currently offer a pay-per-mile plan, we know that smarter pricing based on real driving habits matters. That’s why we created DriveEasy, our usage-based program that helps customize your rate based on how you drive, not just how far you go.

Let’s explore what car insurance by the mile is, how it works, and why GEICO’s DriveEasy program might be a better option.

How Does Pay-Per-Mile Insurance Work?

Pay-per-mile insurance is a type of car insurance that charges you based on how much you drive. It's designed with low-mileage drivers in mind, like people who work from home, city dwellers who rarely use their cars, or anyone looking for a more flexible way to pay for coverage.

The Basics: Base Rate + Per-Mile Charge

This insurance model usually includes a flat monthly base rate to cover essentials like liability protection, plus a per-mile charge that varies depending on how far you drive. For example, someone who drives 200 miles a month would likely pay much less than someone who drives 1,200. Because of this, it’s often marketed as a cost-saving option for people who spend less time on the road.

When Pay-Per-Mile Insurance Makes Financial Sense

Pay-per-mile insurance could be a good fit if you drive fewer than 10,000 miles per year. However, keep in mind that actual savings depend on the provider, your location, and your driving record. Always compare contract terms to see if this type of car insurance makes sense for your situation.

Who Might Consider Pay-Per-Mile Insurance?

Pay-per-mile insurance isn’t for everyone, but it can appeal to certain drivers who aren’t logging a lot of miles.

Low-Mileage & Remote Workers

If you work from home, are retired, or simply don’t drive much, a traditional insurance plan based on average driving habits might not reflect your lifestyle. Pay-per-mile insurance is often appealing to people who stay close to home and want their lower mileage to count toward lower rates.

City Drivers & Environmentally Conscious Shoppers

Live in the city and rely on biking, walking, or public transit more than your car? Pay-per-mile insurance may be a fairer way to pay, especially if you only drive on weekends or for errands. It's also a popular option for drivers who want their lower-impact lifestyle to show up in their premiums.

Limitations of Pay-Per-Mile Programs

Pay-per-mile insurance can sound like a great option, but there are a few limitations that could affect your eligibility and savings.

Limited Availability & Eligibility

Not all insurers offer pay-per-mile insurance, and it’s only available in select states. Even if it sounds like a perfect match for your lifestyle, you’ll need to check if it’s an option where you live and whether you meet the provider’s specific requirements.

Not Just Mileage—Other Factors Still Apply

Even with pay-per-mile programs, mileage isn’t the only thing that affects your rate. Just like traditional insurance, factors such as your driving record, vehicle type, and location still play a role in determining what you pay. So while fewer miles may help, they’re just one part of the picture.

GEICO’s Alternative to Pay-Per-Mile Programs: DriveEasy

If you’re curious about pay-per-mile insurance because you drive less or want more control over your rates, GEICO offers a smart alternative: DriveEasy*. This app-based program helps personalize your car insurance by looking at how you drive, not just how far.

What Is DriveEasy?

DriveEasy is GEICO’s usage-based insurance program that tracks driving behaviors through our mobile app. It looks at things like hard braking, phone use while driving, and the time of day you’re on the road. By monitoring these habits, DriveEasy helps determine a rate that’s more reflective of your individual driving style.

DriveEasy vs. Pay-Per-Mile Insurance

Unlike pay-per-mile insurance, DriveEasy doesn’t calculate your rate strictly by mileage. Instead, it focuses on how safely and responsibly you drive. That means even if you’re not putting in a lot of miles, you can still benefit.

Who Should Consider DriveEasy?

DriveEasy is a great option for drivers who want more say in their car insurance costs. If you’re low-mileage, safety-focused, or simply want a rate that reflects real driving habits, this program gives you a chance to earn rewards for good behavior behind the wheel.

Tips for Saving if You Drive Less

Even if pay-per-mile insurance isn’t available to you, there are still smart ways to lower your car insurance costs when you don’t drive often. From usage-based programs to simple discount checks, a few quick steps can help you keep more money in your pocket. Check out these tips for saving on car insurance to get started.

Ask About Low-Mileage Discounts

Some insurers, including GEICO, offer discounts for driving fewer miles than average. If your daily commute is short—or you’ve cut back on driving altogether—it’s worth asking about available low-mileage and usage-based car insurance discounts. You might be surprised at how much you can save just by updating your mileage.

Combine Policies and Practice Safe Driving

You can also lower your premium by bundling your car insurance with other policies like homeowners or renters insurance. Another way to save? Maintain a clean driving record. GEICO’s Good Driver Discount rewards drivers who avoid accidents and violations, meaning safe habits pay off over time.

Final Thoughts on Pay-Per-Mile Insurance & Alternatives

Pay-per-mile insurance can be a smart option for some low-mileage drivers, but it’s not the only way to save. Even though GEICO doesn’t offer this exact model, we’re committed to helping drivers find affordable coverage that fits their lifestyle. With DriveEasy, good driver discounts, and low-mileage savings, you have options to take control of your rate and keep costs down.

Ready to see how much you could save? Get a free car insurance quote online, contact us, or find a GEICO agent near you for personalized guidance.