With Colorado’s rising car insurance rates, pay-per-mile insurance is gaining popularity among low-mileage drivers. Instead of paying a flat rate, you’re charged based on how much you drive, making it ideal for remote workers, retirees, or city dwellers who use public transit.
But is it the best option for you? In this guide, we’ll cover:
✔ How pay-per-mile insurance works in Colorado
✔ Top providers and their rates
✔ Who benefits most (and who should avoid it)
✔ Real cost comparisons vs. traditional insurance
How Does Pay-Per-Mile Car Insurance Work?
Pay-per-mile (PPM) insurance combines a low base rate with a per-mile fee. Your total cost depends on two factors:
- Base Rate – A fixed monthly fee (typically $30-$50).
- Mileage Rate – A small charge for each mile driven (e.g., $0.05-$0.10/mile).
Example Cost Breakdown:
- Base Fee: $40/month
- Miles Driven: 500 miles
- Per-Mile Rate: $0.07
- Total Monthly Cost: $40 + (500 x $0.07) = $75
Compare this to a traditional policy costing $120/month, and you save $45 (37%).
Who Should Consider Pay-Per-Mile Insurance in Colorado?
✅ Best For:
- Low-mileage drivers (<7,000 miles/year)
- Remote workers or hybrid commuters
- Denver/Boulder residents using public transit
- Retirees or part-time drivers
- Students with occasional car use
❌ Not Ideal For:
- Long commuters (e.g., Colorado Springs to Denver)
- Rideshare/Uber drivers (high mileage voids savings)
- Road trip enthusiasts (summer mountain trips add up)
Top Pay-Per-Mile Insurance Providers in Colorado
| Company | Base Rate | Per-Mile Rate | Best For |
|---|---|---|---|
| Metromile | $29-$50 | $0.05-$0.10 | Tech-savvy drivers |
| Milewise (Allstate) | $35-$60 | $0.06-$0.12 | Allstate customers |
| Nationwide SmartMiles | $40-$70 | $0.05-$0.08 | Families with low-mileage cars |
Key Features Compared:
- Metromile: Best app, real-time tracking, and free roadside assistance.
- Milewise: No upfront device—uses smartphone tracking.
- SmartMiles: Good for bundling with home insurance.
Pros & Cons of Pay-Per-Mile Insurance
✔ Pros:
- Save 20-40% if you drive under 8,000 miles/year.
- Fairer pricing (you only pay for what you use).
- Encourages less driving (good for eco-conscious drivers).
✖ Cons:
- Tracking required (OBD-II device or phone app).
- Mileage caps (some plans charge extra after a threshold).
- Not for high-risk drivers (DUIs/tickets disqualify you).
How to Get the Best Pay-Per-Mile Rates in Colorado
- Compare Quotes – Rates vary by ZIP code (Denver vs. rural CO).
- Ask About Discounts – Good driver, multi-car, or bundling.
- Adjust Your Base Rate – Higher deductibles lower monthly costs.
- Monitor Your Miles – Use apps like GasBuddy to track habits.
FAQs About Pay-Per-Mile Insurance in Colorado
Q: Does pay-per-mile work for Denver commuters?
A: Only if you drive under 500 miles/month. Otherwise, traditional insurance may be cheaper.
Q: How is mileage tracked?
A: Via an OBD-II device (Metromile) or smartphone app (Milewise).
Q: Are there hidden fees?
A: Some insurers charge extra for excessive miles (e.g., over 10,000/year).
Q: Can I switch mid-policy?
A: Yes, but check for cancellation fees (usually none with pay-per-mile).
Final Verdict: Is Pay-Per-Mile Insurance Worth It?
If you drive less than 600 miles/month, pay-per-mile insurance can save you hundreds per year. However, frequent drivers or road-trippers should stick with traditional policies.
🚀 Ready to See Your Savings? Get Free Colorado Pay-Per-Mile Quotes Now!