Is Pay-Per-Mile Auto Insurance Worth It for Military Members?

When you’re in the military, paying for car insurance can be frustrating. Maybe you’re living on the installation and barely drive. Or your spouse has a telework assignment, so they don’t have a commute. Maybe your car is just going to be sitting there for six months while you’re deployed. Or you’ve got an overseas PCS move coming up, and you’ll be storing your vehicle. In situations like these, pay-per-mile car insurance could save you money.

With pay-per-mile car insurance, your premiums are based on how many miles you drive. Don’t drive much? Cheaper insurance. On the other hand, if your mileage goes up, so do your rates. That could cost you if you suddenly need to make a cross-country move or shift to off-installation living.

Before you sign up for low-mileage car insurance, you need to know when it makes sense and when it’s not the right choice. 

How Pay-Per-Mile Car Insurance Works

Pay-per-mile is a type of usage-based car insurance (UBI), where your rate fluctuates depending on your usage of the car. The pricing structure is different from standard car insurance.

With pay-per-mile car insurance, you won’t have a flat, fixed premium that you pay every six months or a year. Instead, you’ll typically have a consistent monthly base rate plus a per-mile surcharge. 

Pay-per-mile car insurance payments are calculated like this: 

Base rate + (miles x per-mile rate) = monthly rate.

Suppose your base rate is $30, your per-mile rate is 5 cents, and you drove ten miles per day last month (300 miles). Your rate would be $30 plus $15 for the miles you drove (300 x 0.05), or $45 for the month.

To find out your monthly mileage, the car insurance company tracks you while you drive, either with a telematics app on your phone or a device you plug into your car. They collect data on your location, miles driven, and even your driving habits, like hard braking. Interestingly, 80% of drivers who use telematics apps like these reported changing their driving habits, with 45% making significant changes, according to reports from the Insurance Research Council.

Pricing (and tracking) aside, pay-per-mile car insurance offers the same protection as standard car insurance. You can choose your liability limits and coverage amounts and deductibles for comprehensive, collision, and uninsured/underinsured motorist coverage. You can also add medical payments, personal injury protection, or other add-ons where available. You’ll just pay less by driving less.

When Pay-Per-Mile Insurance Saves Money

Pay-per-mile car insurance makes the most sense for people who don’t drive much. The average driver puts 13,476 miles on their car in a year, according to the U.S. Department of Transportation Federal Highway Administration. If you’re a low-mileage driver who drives 10,000 miles or less per year, pay-per-mile car insurance is worth looking into. Pay-per-mile insurance will likely save money for those who put fewer than 8,000 or 9,000 miles on their car.  

If the following situations are familiar, you may be a low-mileage driver:

• Remote work: By eliminating a daily commute to work, your annual mileage could be much lower than the average, potentially by thousands of miles.
• Short commute: The average commute to work is 27 minutes, according to 2024 data from the Census Bureau. If your drive to work is less than that (and you don’t make it up in other ways, like weekend road trips), you might be a low-mileage driver.
• Two or more vehicles: When you have a second car, it’s often used less than the daily driver. If your second car is something “fun,” that you only bring out of the garage when the weather’s nice, check your annual mileage — it could be much lower than average.

Military Situations Where It Can Be Especially Helpful

There are several scenarios where a military member could benefit from low-mileage car insurance. 

Deployment

When you’re deployed, your vehicle might sit in the garage unused for months. Pay-per-mile car insurance can reduce your premiums while you’re away, since you won’t be adding miles. Some insurers, like USAA and GEICO, do offer low-priced storage insurance for vehicles during deployment, but there are often restrictions on how the car can be used and where it must be stored. 

If you’ll be back before the policy term expires, or if a family member might drive your car occasionally while you’re away, pay-per-mile insurance offers more flexibility while maintaining active coverage. 

Guard and Reserve Members

If you’re only driving to the installation once a month plus two weeks a year for annual training, your mileage could be lower than that of a full-time, active-duty member who drives to and from work daily. Plus, if you’ve been activated or mobilized, you won’t be driving your personal vehicle much (if at all), further reducing your miles driven. 

Pay-per-mile car insurance can help you lower your premiums in scenarios like these when your mileage is low. However, make sure you factor in your civilian commute and any other driving, since those miles add up on a pay-per-mile policy.

Leaving Your Vehicle with Family

When you’ve received PCS orders, especially to a duty station overseas, it can make a lot of sense to leave your car behind instead of shipping it to your new home or paying for storage. Your family member can drive it occasionally and keep up with periodic maintenance. If the car isn’t used for daily transportation, the mileage will stay low.

In this case, pay-per-mile car insurance maintains coverage on the car while helping keep costs down. Just keep in mind two important points: the family member who drives the car may need to be named on your policy, since they’ll be a regular driver, and they’ll need to be careful to keep the mileage down, or your costs could jump with additional miles. 

Your Car Is Only Used on the Installation

Living in military housing often means a low-mileage lifestyle. You have a short commute to work, and you’re typically also close to the other places you’d visit, like the commissary or Exchange, which are often close enough to walk. 

If you’re only using your car on the installation and driving short distances, you’re not adding a lot of miles to your car. Since pay-per-mile car insurance is designed for low-mileage drivers like you, it could be a great way to keep your car insurance costs down. 

When It Might Not Be a Good Fit

Low-mileage car insurance won’t always be the best fit. In some scenarios, it can even drive your costs higher than what you’d pay with regular car insurance, since every mile adds up.

Consider whether any of the following situations apply to you before you sign up for a policy.

You Have a Long Commute

A long drive to and from the installation (or your civilian job, if you’re a member of the Guard or Reserves) could mean you won’t see much savings. If your commute is more than a couple of miles, your annual mileage might not be low enough to justify pay-per-mile insurance. You may find cheaper military car insurance options elsewhere. 

PCS Moves with Cross-Country Driving

Sometimes receiving PCS orders means you’ll be driving across the country to your next duty station. When you’re charged a fee for every mile, that can add up fast. 

Even if you receive monetary allowance in lieu of transportation (MALT), the standard reimbursement rate of $0.21 per mile might not be enough to offset your insurance costs. In this case, you may be better off with a standard car insurance policy.

Road Trips Between Duty Stations

Even outside of a formal PCS move, travel between duty stations or extended road trips while on leave can add hundreds of miles very quickly. Pay-per-mile car insurance isn’t the right fit if you’re planning lots of driving, whether for work or play. 

The Unknown

Military life is unpredictable. If you are working on a tight budget and can’t guarantee you can keep your miles low, the unpredictability may not be the wisest financial decision.

Companies Offering Pay-Per-Mile Insurance

You’ll find low-mileage, usage-based car insurance at plenty of insurance companies. Your insurance agent can help you decide if switching up your policy makes sense.

However, military members and their families are smart to do some comparison shopping first. Comparing quotes is the best way to find a good rate on military car insurance. Check out some of the insurance companies that offer pay-per-mile insurance and request a quote, as rates vary by insurer.

Some companies that offer this type of policy nationwide include:

• Nationwide’s SmartMiles program
• Allstate’s Milewise
• USAA’s SafePilot Miles

Depending on the state you live in, you can also find pay-per-mile car insurance with regional carriers, like MileAuto, which is available in eight states. Some companies offer usage-based insurance, which is strictly pay-per-mile, but does take the miles you drive into account when setting rates. GEICO’s program is called DriveEasy, while State Farm’s is called Drive Safe & Save.

Don’t forget to check on military discounts, too. USAA and GEICO are well known for military-friendly car insurance and other benefits, but you’ll also find military discounts at other carriers.

Bottom Line

Pay-per-mile car insurance could be a way to lower your car insurance, but only if your mileage is consistently low each month. When you’re in the military, there are plenty of scenarios where you won’t be driving much, but new orders could change your situation.

If you think pay-per-mile could be a good option for you, ask yourself a few key questions:

• How many miles do you drive each month?
• Is your mileage consistent, or do you swing from nearly nothing to big trips?
• Will your situation change soon?
• Who else will be driving your car?
• Are you good with the insurance company tracking your driving?

Check your odometer and car service records to get an idea of your average monthly mileage. When requesting quotes, use the insurer’s quote tool to get an estimate of how much a pay-per-mile policy could cost. Always compare multiple quotes to make sure you’re getting a good price. Start with our roundup of the best car insurance companies for military members to find a good fit for your current situation.