Yes, some usage-based car insurance programs really can cut your premium by up to 40 percent, but that number represents the ceiling, not the floor. Nationwide SmartRide offers up to a 40 percent discount for its safest drivers, and Mile Auto advertises similar savings for people who drive under 10,000 miles per year. The reality for most people is more modest. According to Consumer Reports, the median annual savings across all telematics users comes out to about $120 per year.
Younger drivers tend to do better, with median savings of $245 per year, while drivers over 70 average around $93. The gap between the marketing promise and the typical result is worth understanding before you hand over your driving data. This article breaks down how each major program actually works, what real drivers are saving, which programs can raise your rates versus which ones can only lower them, and the privacy tradeoffs that come with letting an insurer monitor your every turn. Whether you are a low-mileage commuter, a retiree who barely drives, or a younger driver tired of paying inflated premiums based on your age rather than your actual habits, there is likely a program worth considering. But the details matter more than the commercials suggest.
Table of Contents
- Which Usage-Based Car Insurance Apps Offer the Biggest Premium Discounts?
- What Do Drivers Actually Save With Telematics Insurance Programs?
- How Pay-Per-Mile Insurance Works for Low-Mileage Drivers
- How to Choose Between Behavior-Based and Pay-Per-Mile Programs
- Privacy Risks and Regulatory Crackdowns on Driving Data
- Why Adoption Is Still Low Despite Growing Savings
- Where Usage-Based Insurance Is Headed
- Conclusion
- Frequently Asked Questions
Which Usage-Based Car Insurance Apps Offer the Biggest Premium Discounts?
The landscape breaks into two categories: behavior-based programs that score how you drive, and pay-per-mile programs that charge based on how much you drive. On the behavior side, Nationwide SmartRide leads with its potential 40 percent discount and a policy that will not raise your rate based on telematics data, which is a meaningful distinction. Allstate Drivewise offers up to 30 percent off and gives you an automatic discount just for enrolling, but comes with a catch: in some states, Drivewise can actually increase your rates if the data shows risky driving habits. State Farm Drive Safe & Save sits in the safer camp alongside Nationwide, promising it will only lower your premium, never raise it. Progressive Snapshot saves drivers an average of $200 per year, though it scored lowest in J.D. Power’s 2024 U.S. Auto insurance Study for UBI customer satisfaction.
On the pay-per-mile side, Nationwide SmartMiles saves drivers an average of 25 percent and is available in 40 states, with a 250-mile daily cap so a single road trip will not wreck your bill. Mile Auto targets low-mileage drivers specifically, advertising savings up to 40 percent for those under 10,000 miles annually, though it is only available in Arizona, Florida, Georgia, Ohio, Oregon, Tennessee, and Texas. If you were considering Metromile, that ship has sailed. Metromile was acquired by Lemonade in 2022, the brand has been retired, and it no longer accepts new quotes, though existing customers can still manage their policies. The important comparison is between programs that can only help you and programs that can also hurt you. Nationwide SmartRide and State Farm Drive Safe & Save are no-risk propositions. Allstate Drivewise and some other programs can penalize poor driving scores. Before enrolling anywhere, ask the specific question: can this program increase my premium?.
What Do Drivers Actually Save With Telematics Insurance Programs?
Consumer Reports dug into the real numbers, and they paint a more grounded picture than the advertisements. The median annual savings across all telematics users is $120 per year. That is not nothing, but it is a long way from the 40 percent headline figure. The savings distribution skews heavily by age. Policies with younger drivers saw median savings of $245 per year, which makes sense since younger drivers are typically overcharged relative to their actual risk. Drivers under 45 saved a median of $145 per year, those between 45 and 59 saved $102, drivers aged 60 to 69 saved $115, and those 70 and older saved $93. However, if you are already getting a low rate because of a clean record and decades of driving history, telematics may not move the needle much.
The programs deliver the most value to people whose current premiums are inflated by demographic factors rather than actual driving behavior. one finding from Consumer Reports that stands out: Black policyholders saw median savings of $186 and Latino policyholders saved $174, both higher than white policyholders at $98 and Asian policyholders at $109. This suggests telematics may help correct some of the pricing disparities baked into traditional rating models that rely heavily on zip code and credit score. The limitation here is selection bias. Only 14 percent of policyholders surveyed by Consumer Reports had actually enrolled in telematics with their current insurer. The people who sign up tend to be those who already suspect they are good, low-risk drivers. If you know you brake hard, drive late at night, or regularly exceed speed limits, telematics might confirm what your insurer already suspects, and in programs without rate-increase protections, it could cost you.
How Pay-Per-Mile Insurance Works for Low-Mileage Drivers
Pay-per-mile insurance is the most straightforward version of usage-based pricing. You pay a low base rate plus a per-mile charge, typically a few cents per mile. If you work from home, are retired, live in a city where you walk or take transit most days, or keep a second car that sits in the driveway more than it moves, this model can produce dramatic savings. Nationwide SmartMiles, for instance, saves participants an average of 25 percent, and it caps charges at 250 miles per day, so an occasional long drive will not blow up your monthly bill. Mile Auto takes a slightly different approach, using photos of your odometer rather than a plug-in device or always-on app to verify mileage. The company advertises savings up to 40 percent for drivers under 10,000 miles per year. The tradeoff is limited availability.
Mile Auto currently operates in only seven states: Arizona, Florida, Georgia, Ohio, Oregon, Tennessee, and Texas. If you live elsewhere, Nationwide SmartMiles with its 40-state footprint is the more accessible option. The math is simple enough to run yourself. Take your current annual premium, estimate your yearly mileage, and calculate what a per-mile rate would cost. If you drive under 7,500 miles per year, pay-per-mile programs almost always save money. Between 7,500 and 12,000 miles, the savings depend on the specific program and your base rate. Over 12,000 miles, you are usually better off with a traditional policy or a behavior-based program instead.
How to Choose Between Behavior-Based and Pay-Per-Mile Programs
The decision comes down to two questions: how much do you drive, and how do you drive? If you drive fewer than 10,000 miles per year and your driving style is average, pay-per-mile will likely save you more. If you drive a normal or above-average amount but you drive carefully, with smooth braking, no late-night trips, and consistent speeds, a behavior-based program is probably the better fit. If you drive a lot and drive aggressively, neither option may help, and some could hurt. Consider the data collection tradeoff as well. Pay-per-mile programs generally need to know how far you drive and sometimes when you drive. Behavior-based programs track much more: hard braking events, rapid acceleration, cornering, phone usage in some cases, time of day, and specific routes. Nationwide SmartMiles uses a small device plugged into your car’s OBD-II port.
Allstate Drivewise uses a smartphone app. Progressive Snapshot can use either. The more data a program collects, the more precisely it can price your risk, but the more of your daily life you are sharing with a corporation whose primary interest is its own profitability. A practical approach is to try a program that cannot raise your rate first. Enroll in Nationwide SmartRide or State Farm Drive Safe & Save, drive normally for the evaluation period, and see what discount you actually earn. If it is modest, you have lost nothing. If it is substantial, you have your answer. Only then consider programs like Allstate Drivewise that carry the risk of a rate increase, and only if the potential upside justifies the gamble.
Privacy Risks and Regulatory Crackdowns on Driving Data
The privacy concerns around telematics are not hypothetical. In January 2025, the Federal Trade Commission took action against General Motors and OnStar for collecting and selling drivers’ geolocation and driving behavior data without adequate notice. The resulting consent agreement now prohibits the company from misrepresenting its data practices. This was not a small insurer cutting corners. It was one of the largest automakers in the world treating its customers’ location data as a product to sell. Consumer wariness is real and measurable. A survey found that 62 percent of UK motorists are worried about sharing personal location data with insurers, and there is no reason to think American drivers feel substantially different.
On the regulatory side, eight new state privacy laws were introduced in 2025. California’s Insurance Consumer Privacy Protection Act began its legislative journey that same year, and the National Association of Insurance Commissioners working group expects to release a full draft of amendments to the insurance data model for public comment by early 2026. The regulatory environment is shifting, but it has not caught up yet. The warning here is blunt: when you enroll in a telematics program, you are creating a detailed record of everywhere you drive, when you drive there, and how you drive. That data could theoretically be subpoenaed in a lawsuit, used in a claim dispute, or shared with third parties in ways the privacy policy technically permits but you did not anticipate. Read the data sharing terms before enrolling, not after. If a program’s privacy policy is vague about who can access your data and for what purposes, treat that vagueness as a red flag.
Why Adoption Is Still Low Despite Growing Savings
Despite over 21 million U.S. policyholders sharing telematics data with their insurer as of 2024, representing a 28 percent compound annual growth rate since 2018, only 14 percent of policyholders surveyed had actually enrolled. Consumer acceptance is widening, according to a January 2026 survey, but the gap between those who could benefit and those who have enrolled remains enormous.
The friction comes from a combination of privacy concerns, confusion about how programs work, and inertia. Most people renew their car insurance on autopilot and never investigate whether a telematics option is available. If you have not looked into usage-based insurance in the past two years, the landscape has changed enough to be worth revisiting. Programs have matured, regulatory guardrails are tightening, and the savings data is now robust enough to set realistic expectations rather than relying on marketing claims.
Where Usage-Based Insurance Is Headed
The trajectory is toward more granular pricing and broader adoption. As connected cars become standard and more vehicles report driving data natively through built-in systems, the opt-in telematics app may eventually give way to insurance pricing that automatically reflects how you use your car. The NAIC’s upcoming data model amendments signal that regulators are preparing for a world where driving data is central to insurance pricing, not a novelty add-on. For consumers, the best outcome is one where telematics replaces blunt demographic proxies like age, zip code, and credit score with actual driving behavior.
The Consumer Reports data showing higher savings for Black and Latino policyholders hints at that potential. But the worst outcome is one where insurers collect everything, share freely, and penalize drivers for data they never intended to hand over. The next few years of state legislation and FTC enforcement will determine which direction this goes. In the meantime, the practical move is to take advantage of programs that can only lower your rate, protect your data where you can, and treat the 40 percent figure as an aspiration, not a guarantee.
Conclusion
Usage-based car insurance can deliver real savings, but the typical experience is closer to $120 per year than the 40 percent maximum that headlines promote. The programs worth trying first are those that guarantee they will not raise your rate: Nationwide SmartRide and State Farm Drive Safe & Save for behavior-based discounts, and Nationwide SmartMiles or Mile Auto for pay-per-mile pricing if you are a low-mileage driver. Younger drivers and those who suspect their premiums are inflated by demographic factors rather than driving habits stand to save the most. Before enrolling, read the data privacy terms carefully, check whether the program can increase your rate in your state, and set expectations based on the median savings data rather than the maximum advertised discount.
Run the numbers against your current premium, try a no-risk program for one evaluation period, and make your decision based on actual results. The technology works. The savings are real. But like most things in personal finance, the details in the fine print matter more than the number on the billboard.
Frequently Asked Questions
Can usage-based insurance raise my rates?
It depends on the program. Allstate Drivewise can increase your rates in some states based on risky driving behavior. Nationwide SmartRide and State Farm Drive Safe & Save will only lower your premium, never raise it. Always confirm the specific policy for your state before enrolling.
How much do most people actually save with telematics insurance?
The median savings across all telematics users is about $120 per year, according to Consumer Reports. Younger drivers save more, with a median of $245 per year, while drivers over 70 average about $93 per year. The advertised maximums of 30 to 40 percent represent the best-case scenario for the safest drivers.
Is pay-per-mile insurance worth it if I only drive occasionally?
If you drive under 10,000 miles per year, pay-per-mile programs like Nationwide SmartMiles or Mile Auto are likely to save you money. SmartMiles drivers save an average of 25 percent, and the program caps your daily mileage charge at 250 miles so occasional road trips will not spike your bill.
What happened to Metromile?
Metromile was acquired by Lemonade in 2022 and the brand has been retired. It no longer accepts new quotes. Existing Metromile customers can still manage their policies, but new customers should look at Nationwide SmartMiles or Mile Auto for pay-per-mile coverage.
What data do telematics apps collect?
Behavior-based programs typically track hard braking, rapid acceleration, cornering, time of day you drive, and sometimes phone usage while driving. Pay-per-mile programs primarily track mileage and sometimes trip timing. The FTC’s 2025 action against General Motors and OnStar highlighted that some companies have collected and sold this data without adequate consumer notice.
Is my telematics data private?
Not necessarily. Your driving data could potentially be shared with third parties, used in claim disputes, or subpoenaed in legal proceedings. Eight new state privacy laws were introduced in 2025, and California’s Insurance Consumer Privacy Protection Act is working through the legislature, but comprehensive protections are not yet in place. Read the data sharing terms carefully before enrolling.
