Is Pay As You Go Insurance Right for You?

Compare quotes from 50+ top insurance companies for free with Jerry
No long forms · No spam · No fees
Find insurance savings (100% Free)
Jerry partners with more than 50 insurance companies, but our content is independently researched, written, and fact-checked by our team of editors and agents. We aren’t paid for reviews or other content.
Every driver is familiar with the traditional method of purchasing car insurance. It’s the flat-rate policy that charges you an annual premium based on your previous driving history and risk profile and lets you drive as much as you want in that 12-month period.
But another option is available from several providers today:
pay as you go insurance
. What is it, and is pay as you go insurance worth a look? Here's what you should know, with a little help from
car insurance
broker and comparison app
Compare auto insurance policies
No spam or unwanted phone calls · No long forms · No fees, ever

What is pay as you go insurance?

If you’re a homeowner, most utilities charge you based on consumption rates. You only pay for the amount of electricity, natural gas, and water that you use. Pay as you go insurance is similarly structured, but for your car.
With pay as you go insurance, your premiums are based on your driving. Naturally, the more miles you rack up on the odometer, the higher the likelihood you’ll get into an accident, whether it’s your fault or not. If you drive more, you pay more. If you drive less, you
pay less

Is pay as you go car insurance cheaper?

The fee structure starts with a base insurance rate, then adds on the cost per mile. How is your mileage tracked? A small device is installed in your car that keeps track of your miles driven. Your payment will vary from month to month simply because you’ll drive different distances in each time period.
Let Jerry find your price in only 45 seconds
No spam · No long forms · No fees
Find insurance savings (100% Free)

Weighing the pros and cons of pay as you go insurance

Wondering if pay as you go insurance is right for you? That’s an individual decision you have to make, although there are positives and negatives to this type of policy.
  • The same coverage as a traditional auto insurance policy.
  • Lower insurance premiums for motorists who drive fewer miles.
  • Saves money if you spend a lot of time in the car in congested traffic but don’t go far.
  • Perfect for drivers who own a second vehicle that’s rarely driven, or for people who work from home.
  • You can save money by driving less.
  • Your premium changes month to month, making your banking a little less straightforward.
  • A change in driving habits or a job change that requires a long commute could increase your insurance costs.
  • It doesn’t work well for households with multiple drivers.

Is it Worth It?

A program like Nationwide’s
usage-based insurance could mean significant savings for some. For others, it simply doesn’t make sense. Here are a couple of scenarios where pay as you go insurance could benefit.
  • A recent graduate under the age of 25 owns a car but shares carpooling duties with three co-workers. Being considered a high-risk policyholder, a normal policy would be quite costly, especially for days that the car doesn’t move at all. Usage-based insurance would save this driver because they aren’t paying for the days the car is parked, only for when it’s used.
  • A mid-thirties woman with a clean driving record for the past five years commutes 30 miles round-trip into the city five days a week, plus she leads an active lifestyle in the evenings. With usage-based insurance, her premiums are higher than a traditional rate, so it doesn’t make sense for her.
It benefits you most to embrace pay as you go insurance if you’re a
driver in a high-risk category
, someone who accumulates fewer miles than average, or you’re insuring a seldom-used extra vehicle.
If you prefer steadier insurance, there are countless companies to choose from. To get the best quote as quickly as possible, try
. A licensed broker, Jerry does all the hard work of finding cheap quotes from the top name-brand insurance companies and buying new car insurance. Jerry will even help you cancel your old policy.
And to ensure you always have the lowest rate, Jerry will send you new quotes every time your policy comes up for renewal, so you’re always getting the coverage you want at the best price. This level of service is why Jerry earned a 4.6/5 rating on the App Store and made it the top insurance app in the country.
Haven’t shopped for insurance in the last six months? There might be hundreds $$$ in savings waiting for you.
Judith switched to Progressive
icon savingsSaved $725 annually
Alexander switched to Travelers
icon savingsSaved $834 annually
Annie switched to Nationwide
icon savingsSaved $668 annually

Easiest way to compare and buy car insurance

No long forms
No spam or unwanted phone calls
Quotes from top insurance companies
Find insurance savings — it's 100% free