What is pay-per-mile car insurance?
Pay-per-mile car insurance charges you a base rate plus an additional amount based on how many miles you drive. Many insurers, including Progressive, don't offer pay-per-mile insurance. Usage-based insurance (UBI) is a more popular option, matching your rate to how much and how safely you drive. With any car insurance policy, insurers often ask how many miles you drive. The more miles you drive, the higher your rate could be. In most states, Progressive only asks how many miles you drive for your work commute.
Does car mileage impact my insurance rate?
No, your car's age may impact your insurance rate, but a higher or lower reading on your odometer isn't something insurers generally use to set rates.
That said, the rough average number of miles you drive per year can impact your car insurance rate. What you use those miles for — pleasure or commute driving — can also affect your rate.
Take care to report your car usage and mileage accurately. If you rarely drive your car and don't use it for regular errands or commuting, your insurer may classify the car as being used for "pleasure." This could qualify your car for a lower rate than a daily driver or commuter car would get.
How to calculate your estimated annual mileage
You can calculate your estimated annual mileage by comparing your car's recent mechanic records or by tracking your mileage for a month and multiplying by 12. The average American drives 13,476 miles per year, according to the Federal Highway Administration's 2022 report. Here's how to estimate yours:
Use mechanic receipts
Check your recent mechanic receipts, compare the mileage documented on two receipts about a year apart, and use the difference as your estimated annual mileage. If you don't have receipts a year apart, divide the difference by the number of months that separate the two receipts and multiply that number by 12 for a yearly average.
Track your monthly mileage
Track your monthly mileage and multiply that number by 12. Depending on your driving habits, this method may not account for extra mileage from vacations and holidays, so that the estimate could be low. However, this method can be helpful if your mileage has recently changed (e.g., you've started working from home) and you want to ensure the estimate is closer to your current habits.
Your average annual mileage will vary based on your commute time, lifestyle, and how many drivers use the car. Your average mileage can affect your insurance rate because the more miles you drive, the more opportunity you have to be involved in an accident or other event.
Some insurers, including Progressive, only ask about the length of your commute, while others ask for your estimated annual mileage. Data from the United States Census Bureau indicates that Americans faced an average commute of 25.6 minutes in 2021 (excluding work-from-home employees). Despite that average, 7.7% of workers commuted more than an hour, while 17.9% worked from home.
Why most insurers don't offer low-mileage car insurance rates
The term "low-mileage car insurance" or "limited mileage insurance" is a bit of a myth. Many insurance companies ask about and consider mileage as a car insurance rate factor, but they may not place much of an emphasis on it. One reason could be that drivers overestimate and underestimate how much they drive. As a result, most insurers don't offer pay-per-mile options or car insurance discounts for low-mileage drivers.
Are there discounts for car insurance based on mileage?
Auto insurers may not offer a direct discount for driving fewer miles, but some offer usage-based insurance programs that could lower your rate as a reward for driving safely and less overall. There are also plenty of other ways to lower your car insurance rate and get cheap car insurance.