Low-Mileage Car Insurance: How Does It Work?

Car insurance companies consider how many miles you drive in a typical year, among other things, when determining your premiums. The average American drives about 12,000 miles per year. Anything above that is considered high, and anything under 10,000 is regarded as low mileage. 

If you drive several thousand miles below the national average per year, your auto insurance company may consider you a low-mileage driver. Car insurance for low-usage vehicles or low-mileage drivers comes with several perks, but it may not be the best deal you can get for the number of miles you drive annually. Let’s look at how low-use car insurance works, how much it costs, and the best limited-mileage car insurance company.

Car insurance for low-mileage drivers goes by many names, but they all mean the same: you drive significantly less than the national average of 12,000 miles per year. If that’s the case for you, you will want to talk to your insurer about getting your yearly mileage on their records.

A car insurance policy for a low-mileage driver will cost less in premiums than a policy for someone who drives near or above the national average of miles per year. Many insurers offer a discount for people who drive less than the average American because the less you drive, the less likely you are to be in an accident. Thus, you’re less risky for an insurance company to insure.

While there are a few different types of limited-use car insurance on the market, low-mileage car insurance doesn’t involve much more than reporting your mileage each time you renew your policy with your insurer. This is just so they can verify that you’re driving the number of miles you claim to drive.

It’s important to note that the low-mileage insurance discount isn’t very significant. In most cases, the discount is only about 5%. If you drive significantly less than 12,000 miles a year, especially if you drive below 6,000 miles, you may want to look into pay-per-mile insurance to maximize your savings.

The range for low mileage insurance depends on your insurer. Still, typically anything below 10,000 miles annually is considered low use and will qualify you for a low-mileage discount on your premiums. Each insurer constitutes low mileage differently, so be sure to talk to an agent or check your auto insurer’s website for what they consider low-use.

Many insurers offer cheaper rates for low annual mileage car insurance, especially the more prominent insurers with a broad national presence. Geico, Progressive, and State Farm are some of the top insurers for low-mileage car insurance. Each of these companies offers at least a 5% discount on premiums for limited-use vehicles, sometimes even more.

If the number of miles you drive is significantly lower than 10,000 miles annually, you may want to find an insurer that offers pay-per-mile insurance, such as Allstate or Nationwide. If you’re driving 6,000 miles per year or less, the discount you would receive with low-mileage insurance isn’t comparable with the extremely low cost of paying for insurance each time you drive.

The best way to find a car insurance company that provides low-mileage insurance at the best price is to shop around online by getting quotes through several insurers. Here at Clovered, we have a free quoting tool you can use by submitting your information with this form. Or, if you prefer, you can contact one of our agents directly by calling 833-255-4117 or emailing [email protected].  

The best low-mileage car insurance policy will have the coverage you need with a discount for driving a low-use vehicle. Companies like Progressive, State Farm, and Geico offer discounts that average over $100 off your annual premiums if you’re a low-mileage driver. 

Typically, the best car insurance differs from person to person. The best policy for one person might mean great coverage, no matter the cost. The best policy for a different person could mean the cheapest policy, meaning they would want only the minimum amount of coverage required by law at the lowest possible cost.

If you want a full-coverage policy, your premiums will likely be more expensive than other types of insurance coverage, so any discount counts. Most car insurance companies will allow you to stack discounts, so a low-mileage discount combined with several other discounts offered by your insurer may help you maximize your savings without sacrificing coverage. 

If the best low-mileage insurance for you is the cheapest, you will probably want a policy with liability-only coverage. Liability-only coverage is half the amount of coverage you might get with a full-coverage policy, costing about 50% less than a full-coverage policy. 

Car insurance on a low-mileage vehicle typically costs less than the average car insurance policy, but not by much. The average savings on an annual policy with a low-mileage discount is only about $100. The average full-coverage policy typically costs $1,700 annually, so $100 in savings is just barely 5%. 

It’s important to remember that every policy is calculated differently. Therefore everyone pays different amounts for their insurance. Insurers consider your age, gender, where you live, what type of car you drive, and other factors when determining your rate. It’s also important to note that insurance for low-mileage drivers differs by state based on how many miles the average resident travels annually. 

While a car insurance low-mileage discount may not save you more than 5% on your premiums, most major insurers have many discounts for which you may also be eligible. If you qualify for other discounts through your insurer, you may have the opportunity to stack several discounts with your low-mileage discount for better savings.

For example, insurers like Geico, State Farm, and Progressive offer discounts for policyholders who have multiple cars insured on one policy, students who get good grades, safe drivers, and drivers who have safety features installed on their vehicles. When combined, you may be able to save about 50% on your premiums.

While your premiums may be pricier than someone else’s, most insurance companies offer discounts as a percentage rather than a fixed rate, so no matter your coverage, you’re always getting the best savings.