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How is cost calculated with pay per mileage programs?
How do pay per mile programs work? I don't drive as often as I used to and I'm interested in enrolling in a pay per mile program.
Emily Maracle · Updated on
Reviewed by Shannon Martin, Licensed Insurance Agent.
“A variety of
car insurance companies
offer pay per mile programs. They are all fairly similar in how they calculate mileage.From there, you also have your variable rate. Your variable rate will be the cost you pay per mile x the miles you drive.
For example, your base rate may be $40 and your pay per mile rate could be 6 cents. If you drive 40 miles that month, your variable rate is $2.40 (.06x40). This would then be added to your base rate.
The total amount you’d pay that month would be $42.40 (2.40+$40).
Your base rate is still dependent on a variety of factors. You may have a higher or lower base rate depending on:
- your age
- driving record
- type of vehicle
- location”
View full answer
- Gregory R.
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