Best Usage-based Car Insurance Options: A Complete Guide for 2026
Last reviewed: June 2026
You drive a car that sits in the driveway most days. Your insurer still charges a flat rate based on your zip code, age and car model. You end up paying $1,200 a year even though you log only 5,000 miles.
A usage-based policy can cut that cost. It charges you for the miles you drive and rewards safe habits. Savings of $200 to $600 per year are common, and lower mileage can also reduce wear-and-tear expenses.
This post lists the main usage-based insurers available in 2026, explains how each program works, and shows how to decide which fits your driving pattern and budget.
This article provides educational information only and does not constitute financial or legal advice.
Key Takeaways
- Most usage-based programs use a plug-in device or a smartphone app to record mileage and driving behavior
- Expect a base premium plus a per-mile charge that ranges from $0.03 to $0.09.
- Safe-driving discounts can lower the per-mile rate by 10 % to 30 %.
- Companies that rely on a device tend to offer more detailed feedback and lower rates for low-mileage drivers.
- Smartphone-only programs are easier to set up but may charge a higher per-mile fee.
- Compare total annual cost by multiplying your expected miles by the per-mile rate and adding the base fee.
How Usage-Based Insurance Works
For a vetted, regularly updated list of tools that can help, explore our AI insurance tools directory.
Usage-based insurance (UBI) replaces a traditional fixed premium with a hybrid model. You pay a modest fixed fee each month, then a variable charge for each mile you drive. The variable component reflects the risk you create on the road.
Insurers collect data in two ways. The first uses a dedicated telematics device that plugs into the OBD-II port. The device measures speed, hard braking, acceleration, and mileage. The second uses a smartphone app that leverages GPS and accelerometer data. Both methods generate a driver score that influences the per-mile rate.
Most programs let you view your score in real time. Some send tips on smoother braking or optimal routes. Better scores earn lower per-mile rates, sometimes called “safe-driver credits.”
Major Usage-Based Providers in 2026
Allstate Drivewise
Allstate’s Drivewise program uses a Bluetooth-enabled device that plugs into the OBD-II port. The device records mileage, speed, and hard events. Allstate offers a base premium as low as $5 per month. The per-mile charge starts at $0.04 and can drop to $0.028 after six months of safe driving.
Drivewise also provides monthly reports that show where you can improve. Drivers who stay under 7,500 miles per year often see total annual costs around $300.
Progressive Snapshot
Progressive’s Snapshot app works entirely on your smartphone. It tracks mileage, speed, and time of day. The base fee is $6 per month. The per-mile rate starts at $0.05 and can be reduced to $0.032 with a clean driving record for three months.
Snapshot is popular with drivers who prefer not to install a device. However, the app requires permission to run in the background, which can affect battery life.
State Farm Drive Safe & Save
State Farm offers a device called Drive Safe & Save. The device plugs into the OBD-II port and also supports Bluetooth for real-time alerts. The base premium is $4 per month. The per-mile charge begins at $0.036 and can fall to $0.025 after 12 months of safe driving.
State Farm’s program is tied to its broader discount structure. If you already have a homeowner’s policy, you may qualify for an additional 5 % discount on the base fee.
Liberty Mutual RightTrack
Liberty’s RightTrack uses a small plug-in device that records mileage and driving events. The base fee is $7 per month. The per-mile rate starts at $0.045 and can be reduced to $0.030 after 6 months of safe driving.
RightTrack includes a “Roadside Assistance” add-on for $3 per month, which can be useful for low-mileage drivers who travel long distances on weekends.
Metromile (Now Part of Lumen)
Metromile was acquired by Lumen in 2025 and rebranded as Lumen Pay-Per-Mile. The service is fully app-based, with no device required. The base fee is $5 per month. The per-mile charge is a flat $0.06, with no further discounts.
Lumen markets itself to urban drivers who log fewer than 5,000 miles per year. The simplicity of a single per-mile rate makes budgeting easy, though it may be pricier for drivers who improve their habits.
USAA Drive Safe
USAA offers Drive Safe to its military-family members. The program uses an OBD-II device and integrates with the USAA mobile app. The base premium is $4 per month. The per-mile rate starts at $0.037 and can drop to $0.022 after a year of safe driving.
USAA’s rates are often lower than civilian carriers because of the organization’s non-profit structure. Eligibility is limited to active, retired, or former military personnel and their families.
Choosing the Right Program
1. Estimate your annual mileage. If you drive under 5,000 miles, an app-only plan like Lumen may be simplest. If you drive 8,000 to 12,000 miles, a device-based plan with discounts can be cheaper.
2. Consider the base fee. Multiply the monthly base fee by 12 and add the per-mile cost for your expected miles. Compare the total to your current fixed premium.
3. Check safety-score discounts. Some insurers require three months of safe driving before lowering the per-mile rate. If you have a clean record, factor in the reduced rate.
4. Look at additional features. Roadside assistance, accident forgiveness, or multi-policy discounts can tip the balance.
5. Verify state availability. Not all UBI programs are offered in every state. Confirm with your state department of insurance or the insurer’s website.
Example Cost Comparison
| Provider | Base Fee (monthly) | Starting Per-Mile Rate | Discounted Rate | Expected Annual Miles | Estimated Annual Cost |
|---|---|---|---|---|---|
| Allstate Drivewise | $5 | $0.04 | $0.028 | 6,000 | $5×12 + 6,000×$0.028 = $360 |
| Progressive Snapshot | $6 | $0.05 | $0.032 | 6,000 | $6×12 + 6,000×$0.032 = $384 |
| State Farm Drive Safe & Save | $4 | $0.036 | $0.025 | 6,000 | $4×12 + 6,000×$0.025 = $324 |
| Liberty RightTrack | $7 | $0.045 | $0.030 | 6,000 | $7×12 + 6,000×$0.030 = $426 |
| Lumen Pay-Per-Mile | $5 | $0.06 | N/A | 6,000 | $5×12 + 6,000×$0.06 = $480 |
| USAA Drive Safe | $4 | $0.037 | $0.022 | 6,000 | $4×12 + 6,000×$0.022 = $312 |
In this scenario, USAA offers the lowest total cost, but eligibility is limited to military families. State Farm provides the next best price for the general market.
How to Enroll
1. Gather your driver’s license and vehicle registration. Insurers will ask for VIN, make, model, and year.
2. Get a quote online. Most providers have a “Get a Quote” button that asks for zip code and mileage estimate.
3. Choose device or app. If you prefer a plug-in, request the device during checkout. For app-only, download the insurer’s app from the App Store or Google Play.
4. Install and calibrate. Follow the on-screen instructions. Most devices require a 15-minute warm-up period.
5. Set up payment. Monthly auto-pay is usually required to keep the discount active.
6. Monitor your score. Log into the portal each month to see if you qualify for a lower per-mile rate.
Common Misconceptions
- “My insurance will go up if I drive less.” The base fee stays the same, but the per-mile charge drops as mileage falls. Overall cost usually declines.
- “The device tracks my location all the time.” Most devices record mileage and speed, not precise GPS coordinates. Data is anonymized and used only for rating.
- “I can’t switch back to a traditional policy.” You can cancel a UBI policy at any time and replace it with a standard plan, though you may face a short-term surcharge.
- “Young drivers can’t get discounts.” Many programs offer special rates for drivers under 25 who demonstrate safe habits, though the base fee may be higher.
- “My employer’s fleet program will interfere.” If your car is also part of a corporate fleet, check with your employer before adding a personal UBI device.
Tips for Maximizing Savings
- Drive during off-peak hours. Some programs lower the per-mile rate for trips taken between 9 pm and 6 am.
- Avoid hard braking. Smooth deceleration can improve your driver score and trigger discounts.
- Combine policies. Bundling home or renters insurance with a usage-based auto policy can shave 5 % to 10 % off the base fee.
- Review monthly statements. If you see a sudden increase, check for missed trips or device errors.
- Reset the device after long vacations. Some insurers count idle time as “no-drive” days, which can help lower the average mileage.
Frequently Asked Questions
How accurate are smartphone apps compared to plug-in devices?
Smartphone apps use GPS and accelerometer data, which can be slightly less precise than an OBD-II device. For most drivers the difference is a few cents per mile. If you need the lowest possible rate, a plug-in device usually offers a modest discount.
Will my personal data be shared with third parties?
Insurers are required by law to protect personal information. Most UBI programs anonymize data before analysis. Review the privacy policy on the insurer’s website to see what is shared and with whom.
Can I use a usage-based policy for a second vehicle?
Yes, many providers allow separate UBI contracts for each car. You will pay a base fee for each vehicle, but the per-mile rates apply individually.
What happens if I forget to install the device?
The insurer may treat the vehicle as a standard policy and charge the full fixed premium. Some companies allow a grace period of 30 days before suspending the discount.
Do usage-based policies affect my credit score?
Auto insurance premiums are not reported to credit bureaus. Switching to a UBI plan will not impact your credit score.
How often can the per-mile rate change?
Most insurers review driver scores monthly. If you maintain safe habits, the rate can drop after three to six months. Conversely, a series of hard brakes or night trips may raise the rate at the next review.
