Figures reflect 2024–2026 data from named regulators, insurers, and consumer research; savings and pricing vary by state, carrier, and individual driving record. This is general information, not financial or legal advice.
TL;DR — Quick Verdict
- Insurers advertise telematics discounts of 10% to 40%, but Consumer Reports’ 2024 survey of 40,566 policyholders found a median annual savings of just $120.
- Maryland’s insurance regulator found only 31% of enrolled drivers actually saw their premium drop in 2023 — most saw no reduction.
- Young-driver policies saved the most: a median of $245 per year, versus $98 for white policyholders overall.
- The privacy cost is real: California fined General Motors $12.75 million in 2026 for selling driving data to brokers LexisNexis and Verisk, and flagged drivers paid an estimated 12% to 21% more.
- Recommendation: enroll only in a discount-only program (State Farm, Nationwide, USAA) if you drive under 10,000 miles a year and rarely drive late at night — otherwise the data risk outweighs the savings.
Auto premiums climbed roughly 12% in the past year, according to Bankrate, and insurers have a pitch ready: let us watch how you drive, and we’ll cut your bill. Allstate, Progressive, State Farm, and every other major carrier now runs a telematics program promising discounts as steep as 40%. The problem is that the advertised number and the delivered number are rarely the same. When Consumer Reports surveyed 40,566 policyholders in 2024, the median telematics user saved $120 a year — a fraction of the maximum, and Maryland’s insurance department found most enrolled drivers saved nothing at all.
This article breaks down what usage-based insurance (UBI) actually pays out, program by program, and weighs it against a privacy trade-off that regulators are now penalizing in the millions. You’ll get real discount figures from Consumer Reports and the Consumer Federation of America, a pay-per-mile cost model you can run against your own mileage, and a clear rule for who should enroll and who should walk away.
What Usage-Based Insurance Actually Pays: The Discount Data
Every major insurer markets a maximum discount, and those maximums cluster between 25% and 40%. What almost none of them advertise is the median — the number a typical driver actually receives. The gap between the two is where most of the confusion lives.
Consumer Reports found that among all telematics users surveyed in 2024, the median annual savings was $120. Progressive, which reports figures differently, says Snapshot users who save money save an average of $322 a year — but roughly 1 in 5 Snapshot drivers pays more after enrollment, per Bankrate’s 2024 analysis. That split matters: some programs only apply discounts, while others can raise your rate.
Source: Consumer Reports and AutoInsurance.com, 2024–2026 program terms (verify at consumerreports.org). Maximum discounts represent best-case outcomes for top-scoring drivers, not typical results.
The lesson from this table is not which number is biggest. It’s the third column. A discount-only program can only help you; a program that raises rates turns your enrollment into a wager on your own driving. If you’re weighing this alongside broader ways to trim your bill, our guide to verified strategies to lower car insurance premiums covers the non-telematics levers first.
Who Actually Saves — and Who Doesn’t
The median savings figure hides enormous variation. Consumer Reports found that young-driver policies delivered the largest cuts, at a median of $245 a year — roughly double the overall median. The survey also documented a racial gap that cut in an unusual direction: median savings ran $186 for Black policyholders and $174 for Latino policyholders, against $98 for white and $109 for Asian policyholders.
Consider two drivers. Maya, 24, commutes 6,000 miles a year, avoids late-night trips, and brakes gently. Her telematics profile is close to ideal, and a program like Nationwide SmartRide could hand her a discount near the top of the range with no downside risk. Contrast that with Dev, who drives 16,000 miles annually including frequent 11 p.m.–4 a.m. shifts. On a program that penalizes risky patterns, his hard-braking events and late hours could push his rate up, wiping out the enrollment bonus entirely.
The single biggest predictor of savings is low mileage. Drivers who log fewer miles consistently save more, which is why young, urban, and remote-working drivers dominate the winners. If you’re a young driver specifically, the mechanics of pricing are worth understanding in depth — see our breakdown of young driver insurance costs and reduction strategies before enrolling.
The Privacy Trade-Off Regulators Are Now Punishing
Telematics data isn’t just used to score you — in several documented cases it was sold. The distinction between a program you opt into and data your car collects silently is where the real damage has occurred.
In May 2026, California Attorney General Rob Bonta announced a $12.75 million settlement with General Motors over allegations that GM sold driving and location data from hundreds of thousands of California drivers to data brokers Verisk Analytics and LexisNexis Risk Solutions. The California Department of Justice said GM earned roughly $20 million nationwide from those sales between 2020 and 2024. According to the FTC’s complaint, OnStar collected location data from some vehicles as often as every three seconds.
The financial impact on individuals was concrete. An Insurify analysis found drivers flagged in LexisNexis Telematics OnDemand reports paid 12% to 21% more on average than drivers without those flags. One driver documented by the FTC saw her premium jump 80% after GM shared 603 driving-activity records from a single vehicle. On January 14, 2026, the FTC finalized a consent order banning GM and OnStar from sharing geolocation and behavior data with consumer reporting agencies for five years — but that federal order carried no monetary penalty, which is what made California’s cash fine the first of its kind.
Not all telematics is this. A voluntary discount-only app is a different animal from a car quietly transmitting your location. But the episode proves the data is valuable enough to sell, and that the same LexisNexis and Verisk reports feeding these programs also feed rate-setting you never see. Under the Fair Credit Reporting Act, you can request your file from either broker and dispute inaccurate entries, which they must investigate within 30 days.
Telematics Discount vs Pay-Per-Mile: Which Is Better for Low-Mileage Drivers?
These two models get lumped together as “usage-based,” but they price you completely differently. A telematics discount program keeps your traditional premium and applies a rebate based on driving behavior. A pay-per-mile program rebuilds your bill from scratch: a small base rate plus a charge for every mile driven.
Pay-per-mile insurance typically runs $0.02 to $0.12 per mile on top of a base rate, according to MoneyGeek and WalletHub. Here’s the arithmetic on an Allstate Milewise-style plan for a retiree driving 4,800 miles a year at a $0.75 daily rate plus $0.06 per mile.
Modeled scenario using published Allstate Milewise rate structure. Source: Trust My Policy and Insurance.com, 2026 (verify at insurance.com). Traditional premium is illustrative; individual quotes vary.
For this low-mileage retiree, the pay-per-mile model saves roughly $1,262 a year. The same math flips for a commuter: at 14,000-plus miles annually, a Nationwide SmartMiles estimate lands only marginally below traditional pricing, and above about 15,000 miles a flat premium usually wins. Neither model requires you to gamble on behavior scoring the way a rate-raising telematics program does — pay-per-mile mostly tracks mileage, not hard braking.
Verdict
For drivers under roughly 10,000 miles a year, pay-per-mile (Nationwide SmartMiles, Allstate Milewise) delivers larger and more predictable savings than a behavior-based telematics discount, and with less scoring risk. For safe drivers logging 10,000–15,000 miles, a discount-only telematics program like State Farm Drive Safe & Save is the better fit. Above 15,000 miles, skip both and shop traditional full coverage.
What Most People Get Wrong About Telematics
Three mistakes turn a reasonable savings tool into a costly one, and all three are avoidable if you know what to check before you tap “enroll.”
Mistake 1: Enrolling in a program that can raise your rate without realizing it. The consequence is a premium increase disguised as a savings opportunity — Geico DriveEasy, Progressive Snapshot, and Travelers IntelliDrive can all bump your rate on poor scores. The correct action is to confirm in writing that the program is discount-only before installing anything, or choose State Farm, Nationwide, USAA, or Liberty Mutual, which apply discounts only.
Mistake 2: Assuming the app replaces your other rating factors. The Consumer Federation of America found insurers keep rating on non-driving characteristics like credit score and ZIP code even after you enroll. Your telematics score sits on top of those factors, not instead of them. If credit is dragging your rate, that’s a separate fix — our analysis of credit score impact on car insurance rates addresses it directly, as does our guide to how filing a claim without raising your rate works.
Mistake 3: Ignoring what happens to the data after you cancel. Consequence: your driving history can persist in a LexisNexis or Verisk file that follows you to your next insurer. The correct action is to request your consumer disclosure report from both brokers under the Fair Credit Reporting Act and dispute any inaccurate entries, then confirm the correction at your next renewal. Drivers comparing carriers should also weigh claims handling, not just price — see our car insurance company claims ratings and prices.
Is Usage-Based Insurance Worth It for You?
Whether UBI pays off comes down to three conditions, and you need all three working in your favor for the savings to reliably beat the privacy cost.
Enroll if you drive fewer than 10,000 miles a year, rarely drive between 11 p.m. and 4 a.m., and can choose a discount-only program. Under those conditions the downside risk is near zero and the upside is real — potentially the top of the 10% to 40% range for a genuinely low-mileage, low-risk driver. A low-mileage lifestyle also pairs well with dropping unnecessary coverage; our comparison of full coverage vs liability-only cost trade-offs is the natural next step for an older paid-off car.
Think twice if you drive more than 15,000 miles annually, work night shifts, or live in a state where telematics can legally raise your rate. In those cases, the median $120 benefit is easily erased by a scoring penalty or simply won’t materialize. Traditional shopping — comparing quotes, adjusting your deductible, and bundling — will usually beat it. Start with your baseline using our data on average car insurance cost by state, then test whether a deductible choice impact on total insurance cost gets you there without surrendering any data at all.
The honest bottom line: usage-based insurance is a good deal for a narrow, identifiable group and a mediocre-to-bad deal for everyone else. The insurers advertising 40% are not lying, but they’re quoting the ceiling to an audience that will mostly land near the floor.
Frequently Asked Questions
How much does usage-based insurance actually save on average?
Consumer Reports’ 2024 survey of 40,566 policyholders found a median annual savings of $120 across all telematics users. Young-driver policies saved more, at a median of $245. Advertised maximums of 30% to 40% apply only to top-scoring, low-mileage drivers — most enrollees land well below that, and Maryland’s regulator found only 31% saw any reduction at all in 2023.
Can a telematics program raise my rate?
Yes, with some carriers. Geico DriveEasy, Progressive Snapshot, and Travelers IntelliDrive can increase your premium based on risky driving data. Progressive reports that roughly 1 in 5 Snapshot users pays more after enrolling, per Bankrate. Discount-only programs — State Farm Drive Safe & Save, Nationwide SmartRide, USAA SafePilot, and Liberty Mutual RightTrack — apply savings only and never raise your rate.
Is my driving data being sold to other companies?
It can be. California fined General Motors $12.75 million in 2026 for selling driver data to brokers LexisNexis and Verisk, who packaged it into reports sold to insurers. An Insurify analysis found flagged drivers paid 12% to 21% more. You can request your file from either broker under the Fair Credit Reporting Act and dispute errors, which they must address within 30 days.
Does telematics work in every state?
No. California heavily restricts telematics-based pricing, so programs there are limited. North Carolina and New York allow telematics to lower your rate but not raise it. Maryland moved toward discount-only rules in 2025. Pay-per-mile availability also varies — Nationwide SmartMiles covers about 40 states, while Metromile operates in far fewer.
How We Researched This Article
Every figure in this article was verified against a named primary or institutional source before publication, following a search-first protocol rather than relying on background knowledge.
Savings figures come from two independent bodies. The median annual savings of $120, the $245 young-driver figure, and the racial breakdown originate in Consumer Reports’ 2024 survey of 40,566 policyholders, published by Consumer Reports. Enrollment and reduction rates — including the finding that only 31% of Maryland enrollees saw a decrease in 2023 — come from the Consumer Federation of America‘s analysis of Maryland Insurance Administration data, the first such study by a state regulator.
Privacy and enforcement details were confirmed against the Federal Trade Commission’s January 2026 consent order and the California Department of Justice’s May 2026 settlement announcement, reported by outlets including the Techlicious summary of the FTC action. Per-mile and program pricing was drawn from carrier rate structures compiled by MoneyGeek and WalletHub.
The pay-per-mile cost table is modeled, not measured: it applies published Allstate Milewise daily and per-mile rates to a fixed 4,800-mile scenario, and the traditional premium comparison is illustrative because individual quotes depend on state, vehicle, and driving record. Discount maximums represent best-case outcomes and should not be read as expected results. Where sources reported ranges rather than point figures — such as the $0.02 to $0.12 per-mile spread — we reported the range. This research was last conducted in July 2026. All figures were verified against named primary sources before publication.