How to Get Cheap Auto Insurance for Low-Mileage Drivers

Saving money on auto insurance is a high priority for most drivers. Paying for expensive car insurance when you don’t put many miles on your car, especially under 25 miles, is very frustrating.

Fortunately, drivers can save on coverage if they know how to get cheap low-mileage auto insurance. You can add discounts or choose pay-per-mile insurance to see significant savings.

Additionally, low-mileage drivers should shop around for insurance. Every auto insurance company looks at annual mileage for car insurance differently, so compare multiple companies to find the best deal on car insurance based on miles driven.

Keep reading to learn more about getting cheap, low-mileage car insurance if you’re a low-mileage driver. We can help you find car pay-per-mile insurance for you for less.

Can you get cheap auto insurance for low-mileage drivers?

Most states require at least a minimum amount of car insurance. However, even that minimum amount of coverage can be expensive. If you average low miles, car insurance savings may be available for you.

It may surprise you to learn that yearly mileage affects auto insurance rates. That’s because drivers who spend more time behind the wheel are more likely to be in an accident.

What do auto insurance companies consider a low-mileage driver?

These days, some drivers are putting significantly fewer miles on their vehicles. It doesn’t make sense to pay for high-priced auto insurance if your car isn’t on the road much.

Drivers in the U.S., on average, drive about 12,000 miles per year. To be considered a low-mileage driver, average annual mileage is usually 7,500 annual miles or less.

However, each insurance company determines what it considers low mileage. For some companies, low mileage means you drive 50 miles a day or fewer. Others only allow you to drive 25 miles per day.

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Companies With the Best Auto Insurance Rates for Low-Mileage Drivers

To understand how your mileage affects your insurance rate, check out this table that shows average rates from top auto insurance companies based on mileage.

Average Annual Auto Insurance Rates by Commute Length

On average, drivers who commute 25 miles per day on average pay $85 a year more. Saving $85 a year might not sound significant, but low-mileage drivers can also save in numerous other ways by getting low-mileage car insurance.

Low-Mileage Auto Insurance Discounts

One way to save is to add auto insurance discounts for low-mileage drivers. Most auto insurance companies offer this discount, and drivers can save up to 30%.

Low-mileage drivers may also be eligible for safe driver, claims-free, and occasional operator discounts.

Purchasing Low-Mileage Auto Insurance

If you work from home or use public transportation, a low-mileage, or pay-per-mile, auto insurance policy may be for you. When you report your average annual mileage to your insurance company, they will let you know if you fit the requirements for the policy.

It may be tempting to underestimate your mileage to take advantage of the savings. But be careful. If the insurance company finds out you lied, you may find yourself in trouble.

Drivers must give accurate mileage information to their insurance company. While it may be tempting to underestimate how far you drive to save money, doing so is considered insurance fraud.

If you’re in an accident that requires vehicle repairs, the repair shop will report your mileage to the insurance company. If you’ve grossly underestimated your mileage, the insurance company can deny the claim.

How can pay-per-mile auto insurance reduce rates?

Drivers who don’t spend much time behind the wheel should consider pay-per-mile auto insurance. As the name suggests, drivers pay for each mile they drive.

Pay-per-mile insurance offers the same coverages as traditional insurance with lower rates for certain drivers. Drivers who work from home, live near public transportation, or are retired see the most savings on insurance costs.

If you are an infrequent driver, you may qualify for the Geico low-mileage discount or savings from State Farm if you drive less than 50 miles per day.

Typically, pay-per-mile car insurance consists of a fixed base rate and a per-mile rate. The usual factors that affect auto insurance — including your age, driving record, and mileage — determine the base rate.

Most insurance companies use a device that plugs into your vehicle to monitor your mileage and count the number of miles driven per day. Your mileage is multiplied by a very low per-mile rate when you drive.

The base rate plus the mileage charge make up your overall rate. However, rates vary, so drivers on a tight budget may have difficulty planning.

For example, if your base rate is $30 a month, and you drive 600 miles with a $0.06 per-mile rate, your monthly cost would be $66. That’s considerably less than a traditional insurance policy.

Most pay-per-mile policies also have a daily mileage limit. So, if you take a road trip, you’ll only have to pay for the maximum mileage allowed.

Pay-per-mile insurance isn’t available in every state, and not every auto insurance company offers it. Although some insurance companies like Metromile specialize in pay-per-mile insurance, other major companies provide the coverage, including Nationwide and Allstate.

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What is usage-based or mileage-based car insurance?

Usage-based insurance, or mileage-based car insurance, is different than pay-per-mile coverage. While pay-per-mile insurance is determined by how far you drive, usage-based telematics insurance is based on how you drive your car.

Either a plug-in device or app monitors specific driving behaviors to calculate a discount of up to 40%. The device usually monitors your speed, hard braking, time of day, mileage, safe driving, and distracted driving.

Each insurance company determines which behaviors are monitored and the discount amount. For example, some insurance companies monitor distracted driving while others do not.

In addition, some car insurance companies require driving behaviors to be monitored continually and offer a discount each renewal. Others only monitor driving for a short period of time and lock in the discount based on that timeframe.

Drivers who score poorly receive less of a discount than drivers who do well. In addition, some companies, like Geico, raise rates if the device detects risky driving habits.

Low-mileage drivers who don’t drive at night or use their phones while driving earn the highest discounts. (For more information, read our “Can You Get Cheaper Car Insurance Over the Phone?“).

In addition to helping you lower your auto insurance rates, these telematic devices also help you drive more safely. According to the Insurance Information Institute, because telematic devices give immediate feedback, drivers correct dangerous driving behaviors quickly.

What are other ways to save on auto insurance?

Many different factors affect auto insurance rates. While you can’t change some factors, like your age, changing other factors can lead to significant savings.

Other ways to save on auto insurance include:

• Keep your driving record clean. Accidents, tickets, and DUIs drastically raise rates. Infractions come off your record in a few years, so avoid new ones to lower rates.
• Raise your credit score. Insurers think that a low credit score means you’re more likely to file a claim. Use credit wisely and avoid late payments to increase your score.
• Reconsider coverages. If you don’t often drive, decide if you need full coverage and add-ons like roadside assistance. Raising your deductible also lowers rates.
• Buy a cheaper car. Auto insurance rates are higher for new and expensive vehicles. A less expensive vehicle with safety features will have lower rates.
• Move. If you live in a high-crime area, car insurance rates are higher. Choose to live in an area with few thefts and a low traffic volume to get the lowest rates.

Although it may not be realistic to move for lower car insurance rates, other factors are easier to change. For example, you can change your coverage today to reduce rates.

Cheap Auto Insurance for Low-Mileage Drivers: The Bottom Line

Low-mileage drivers should take advantage of discounts and consider pay-per-mile or usage-based insurance for lower rates.

Pay-per-mile auto insurance rates combine a base rate with a per-mile charge. While rates are typically much lower than with traditional insurance, pay-per-mile insurance isn’t a good fit for drivers who spend a lot of time on the road.

Usage-based insurance offers a discount based on how you drive. A device monitors and scores behaviors such as speed, mileage, and distracted driving. The higher you score, the more you save.

Low-mileage drivers can also save on their insurance premiums by re-evaluating their coverage amount, raising their deductible, and keeping a clean driving record. A high credit score also lowers rates.

Shop around to find the cheapest auto insurance quotes for low-mileage drivers. Compare rates from multiple companies to find your best deal.