By Dorothy Tucker

(CBS) — Every time Allen Halperin gets behind the wheel he pays a little over a nickel for every mile he drives.

It costs him 5.4 cents to drive to the grocery store and 5.4 cents to drive back. Halperin has his cost down to the penny because that’s how his insurance company, Metromile, charges him.

“You’re paying by the mile versus some flat rate, so you have a chance to affect your own rate by driving fewer miles,” he tells CBS 2’s Dorothy Tucker.

Mollie Heath is another Metromile customer. She averages 50 miles a month. When she signed up, her insurance costs dropped from $170 to $85 a month.

“I looked into it, and I was like this has got to be wrong because this is like too good of a deal,” she says.

The best customer is someone who drives less than 10,000 miles a year, says Dan Preston of Metromile.

Like other insurance plans, the company considers your age, type of car and driving history. Halperin’s total monthly cost varies, averaging $70 a month, saving him $50 off his old insurance.

“It’s actually a very innovative and direct business model,” says insurance consultant Roosevelt Mosley.

He cautions Metromile may not offer the best deal for drivers who have been with a company more than 20 years, or if they have several policies with the same company.

A device installed under your steering wheel records your miles, and GPS tracks your location. The company says you can turn that off. Metromile owners insist they don’t collect information on your driving habits, like speeding or sudden braking. Still, privacy experts warn that could change.

“They’re opening the door right now. They are collecting data, and it may only take a change in the software until they’re collecting additional data,” William Kresse says.

Neither Halperin nor Heath has any real concerns about privacy.

“It only makes sense for people who don’t drive that much,” Heath says.

Over the course of a year the savings can really add up. Allen Halperin would save $600 and Mollie Heath would save just over $1,000.

Dorothy Tucker