When it comes to car insurance, driving less means saving more.
If you're a low-mileage driver, you might think you should be paying less for car insurance. But the concept is a little more complicated and 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.
While there is some wiggle room, generally a "low-mileage" driver is considered someone who drives between 0 and 7,500 miles per year. If you've ever received a car insurance quote before, you're usually rated at the standard US average annual mileage of 12,000. Broken down below, you can see how much your premium can change based solely on your annual mileage.
|Annual Mileage||Average Annual Premium|
|0 - 7,500 miles||$1,409|
|7,500 - 10,000 miles||$1,470|
|10,000 - 15,000 miles||$1,485|
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 less 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.
Using the profile outlined here, we surveyed eight insurance companies to see which one offered the cheapest premium for low-mileage drivers.
|Insurance company||Annual premium|
There's also usage-based insurance — usually backed by telematics devices — which is a young-but-growing type of insurance. A device — either plugged into your vehicle or tied to an app in your phone — monitors the way you drive in order to determine your car insurance premium. By tracking the way you drive, the insurer can more accurately predict the kind of client you will be and more accurately price your premium.
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 below insurers. Keep in mind these programs are not be available in every state.
|Telematics program||Estimated savings|
|Progressive Snapshot||Average of $130|
|Allstate Drivewise||Average of 10-25%|
|State Farm Drive Safe & Save||Up to 15%|
|Nationwide SmartRide||Up to 40%|
|Liberty Mutual RightTrack||Average of 5-30%|
If you're looking for a company-by-company analysis of telematics programs, see our guide.
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.
Compared to the insurance companies mentioned above, Metromile is relatively new to the world of car insurance. Outlined more in-depth here, Metromile sets base monthly rate, after which your premium is generated on a per-mile basis.
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.
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.