Car Insurance for Low-Mileage Drivers

When it comes to car insurance, driving less means saving more.

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What is car insurance for low-mileage drivers?

Unlike in the past, the number of miles you drive can now impact what you pay for your auto insurance policy. Previously, low-mileage drivers had few opportunities to receive cheaper car insurance. With the advent of new technology — and broader changes to the driving habits of many Americans — more car insurance companies are offering opportunities for low-mileage drivers to save money. But the concept can vary considerably based on your insurance company and even your state. Let's break down some of the ways you can save on car insurance including simple low mileage discounts, telematics, and usage-based insurance companies. Here's our guide to car insurance as a low mileage driver.

How-to guide: finding low-mileage car insurance
  1. Am I a low mileage driver?
  2. Where can I find companies with low-mileage discounts?
  3. Where can I find insurance for low-mileage drivers

 


 

What makes you a low-mileage driver?

While there is some wiggle room, most insurance providers consider someone who drives between 0 and 7,500 miles per year to be a "low-mileage" driver. If you've ever received a car insurance quote before, you're usually rated at the standard US average annual mileage of 12,000. However, a number of motorists drive far fewer miles than this. You can see how much your auto insurance rates can change based solely on your annual mileage broken down below.

 

Annual MileageAverage Annual Premium
0 - 7,500 miles$1,409
7,500 - 10,000 miles$1,470
10,000 - 15,000 miles$1,485
15,000+ miles$1,495

 

This is a general estimate of how car insurance costs change depending on mileage. While the average difference in car insurance costs between those who drive fewer than 7,500 miles annually and those who cover 15,000-plus miles is just $86, occasional drivers save up to $436 per year in California! A low-mileage driver in California will save more money than an infrequent motorist in Texas.

 

 


 

What are my insurance options as a low-mileage driver?

Using the profile outlined here, we surveyed eight insurance companies to see which one offered the cheapest premium for low-mileage drivers.

Insurance companyAnnual premium
Allstate$2,308
Farmers$1,862
GEICO$1,694
Liberty Mutual$2,513
Nationwide$1,727
Progressive$1,641
State Farm$1,346
USAA$1,146

 

There's also usage-based insurance programs — usually backed by telematics devices — which are a young-but-growing type of insurance. A device — either plugged into your vehicle or tied to an app in your phone — monitors your driving behavior in order to determine your car insurance premium. Most start with a base rate, which is then adjusted to correspond with your driving habits. This way the insurer can more accurately predict the kind of client you will be and more accurately price your premium. For instance, things like hard braking are even your average speed can be monitored by your insurer. Safe driving can lead to lower rates overall.

The benefit of this kind of program for low mileage drivers is you are somewhat paying for only the car insurance you actually need. In a way, it's a "pay as you go" or "pay as you drive" version of car insurance. Currently, your insurance is derived from your driving record as well as other rating factors that can predict (but are not exact reflections of) your driving habits — such as credit score, age, homeowner status, etc.

If you're looking for insurance companies with telematics programs, consider the insurers below. Keep in mind that pay-per-mile car insurance programs may not be available in every state.

 

Telematics programEstimated savings
Progressive SnapshotAverage of $130
GEICO DriveEasyVaries
Allstate DrivewiseAverage of 10-25%
State Farm Drive Safe & SaveUp to 15%
Esurance DriveSenseVaries
Nationwide SmartRideUp to 40%
Liberty Mutual RightTrackAverage of 5-30%
GEICO DriveEasyVaries

 

If you're looking for a company-by-company analysis of telematics programs, see our guide.

 

Usage-based car insurance

Another way to find car insurance as a low-mileage driver is to shop policies from UBI companies. While many companies offer telematics programs, they're not true usage-based insurance companies. Root and Metromile, briefly detailed below, operate on a "pay-as-you-go" model.

 

Metromile

Compared to the insurance companies mentioned above, Metromile is relatively new to the world of car insurance. Outlined in more depth here, Metromile sets a base monthly rate, after which your premium is generated on a per-mile basis. You'll receive a plug-in device that fits into your vehicle's onboard diagnostics port (OBD-II). There's also a corresponding app that you can download to keep up with billing and even find your car if you've forgotten where you parked. The company offers full coverage options that you would expect to find from conventional insurance companies.

 

Root Car Insurance

Root's philosophy is based on the idea of "car insurance for how you drive, rather than who you are." Instead of relying on credit score and age to price its policies, Root uses your driving habits to determine premiums. If you're a low-mileage driver, this might be a good option for you.

 

Allstate Milewise

Allstate's pay-per-mile insurance program is similar to those above, starting with a base-rate upon which charges are added for additional miles driven. Similar to Metromile, Milewise uses a plug-in device and a corresponding app to keep track of driving habits and mileage. 

 

Nationwide Smartmiles

Nationwide's Smartmiles program is designed for those who rarely drive, but still want to keep a car for occasional use. Motorists pay per mile on top of a base rate. Nationwide offers car insurance discounts for safe drivers through this program. 

 

Mile Auto

Mile Auto is a newcomer in the insurance space. The company's car insurance coverage is relatively straightforward, offering basic liability and full coverage options for low-mileage drivers. Unlike other pay-per mile insurance companies, Mile Auto claims to value your privacy, not requiring a tracking component such as an app or plug-in device. The company has drivers snap a photo of their odometer once a month to determine the amount driven.

 


 

Finding insurance as a low-mileage driver

If you're a low-mileage driver, look for specific programs catering to you. As we've demonstrated, the only real discount you will receive for low mileage without looking into a specific UBI program is if you live in California. Outside of that, the savings are quite small. While many major car insurance companies offer telematic programs, true UBI companies like Root and Metromile are always good places to start. See how much you could be saving as a low mileage driver by entering your zip code below.

 

Compare low-mileage car insurance rates now!

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Recent Questions:

Car insurance for Low-Mileage Drivers

What insurance should I get if I drive my sister 6 miles a day and drive a rental once a month?

There are a couple of things to consider to get insured. Because your sister will own the vehicle, any insurance policy you get will require you list her as an additional interest, just like if you were financing a vehicle.

Will it be cheaper to find a company that will allow 6 cars on one policy?

Most companies will only allow four cars per policy which is why you have two policies currently. There may be a company that will allow you to include all six but I'm not aware of a company that will do that.

Can I get auto insurance for low-mileage driving due to disability?

Because California uses mileage as one of their biggest rating factors, she should be able to find insurance that can accommodate her needs. However, she would need to show proof of how much she drives.

Ross Martin LinkedIn

As a licensed insurance agent, Ross is responsible for researching and writing about all matters related to auto and home insurance. He has a background in writing and education, as well as a master's degree from Royal Holloway, University of London. He has been quoted by CNET, iDriveSafely.com, and Kin Insurance.