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 characterized by someone who drives between 0-7.5k miles per year. If you've ever received a car insurance quote before, you're usually given a standard US average annual mileage of 12k. Broken down below, you can see how much your premium can change based solely on your annual mileage.
|Annual Mileage||Average Annual Premium|
Again, this is a very general estimate of how much your premium can change based on how you drive. While the average mileage in the US between those who drive less than 7.5k miles annually and those who drive over 15k is $71, it's over $403 in California! Meaning, being a low mileage driver in California can potentially save you more money than it can in Texas.
Usage-based insurance, usually backed by telematics, is a relatively new but growing division of insurance. Essentially, a device (either in your vehicle or via an app in your phone) monitors the way you drive in order to determine your car insurance premium. By tracking the way your drive for a pre-determined amount of time, the telematics devices can more accurately predict the kind of client you will be for your insurance company. Thereby more accurately pricing your premium, in theory.
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, the insurers below have begun to implement programs designed for you. Keep in mind, these programs will not be available in every state.
|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 look specifically at UBI companies. While many companies offer telematic programs, they're not true usage-based insurance companies. Root and Metromile, briefly explained below, are more aligned with the "pay-as-you-go" idea of car insurance.
Compared to the other insurance companies mentioned above, Metromile is relatively new to the world of car insurance. Outlined more in-depth here, Metromile works by giving you a base fee of $29 after which your premium is generated on a per mile basis.
Root's entire company is based on the idea of car insurance for how you drive rather than who you are. Moving away from the idea of your credit score and age, Root uses your driving habits to determine your premium. If you're a low mileage driver, this might be a good option for you.
If you're a low mileage driver, you should look for specific programs that can cater 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.
Can I get auto insurance for low-mileage driving due to disability?
My mother is no longer driving due to a disability. However, she would like to keep the vehicle in case ...