The amount of mileage a person drives each year can directly affect the amount of risk that’s factored into auto insurance quotes. The less time spent driving, the lower the odds the driver will be involved in an automobile accident and file a claim. As such, some auto insurance carriers offer low-mileage discounts to their customers.
What’s considered low-mileage will vary by state and by provider, but low-mileage is considered to fall between 5,000–7,500 per year, though some carriers will offer a discount for less than 15,000 miles per year, so you’ll want to take this into consideration when you’re comparing quotes. The discounts can vary widely as well, with some carriers offering as little as a 2% discount while others offer up to 20% in savings.
You may want to consider any recent lifestyle changes that might affect the number of miles driven and your insurance rates. For example, perhaps your commute to work is shorter, or you’re carpooling or taking public transportation. You might also be insuring a vehicle that’s not your primary vehicle and is driven less on an annual basis. In any case, it’s wise to consider the amount of miles driven on a regular basis for work/school/errands/annual vacations/etc. to determine if you might qualify for a low-mileage discount.
Keep in mind, your insurance carrier will want proof of the odometer reading and underestimating your mileage could be considered policy misrepresentation and result in a loss of coverages. For example, if you own one vehicle and your daily commute is 25 miles each way, 5 days a week, that equates to 20,000 miles per year, and your odometer would represent the same. You’ll want to accurately report this to your carrier to ensure that you’re properly covered.
Don’t simply assume that your current carrier will extend a low-mileage discount. A national survey from the Consumer Federation of America published on May 21, 2015 found that many insurers did not offer any discount for low-mileage and quoted the same premium for 5,000 and 20,000 miles driven annually. If that’s the case with your carrier and you’re a low-mileage driver, it may be a good opportunity to shop around. According to a January 2017 survey, 39 percent of U.S. policyholders have never shopped their auto insurance for a better rate. There may be other discounts that apply as well, such as a good driving discount. Consider your annual mileage and lifestyle changes, such as moving to a new residence, and you may be able to save yourself some money on your yearly premiums.