If you’re like most drivers, you need car insurance. But what if you rarely drive or have a short commute? A low-mileage car insurance policy can help you maintain your coverage without having to pay unnecessarily high premiums. This can be a good option for anyone who works from home, is retired, or often uses public transit or ride-sharing services.
According to our most recent data, drivers across the country pay an average of $1,394 for low-mileage auto insurance policies — defined as 6,000 miles or less in our study. USAA offers the lowest representative rate for drivers with low mileage auto insurance. If you are not eligible for USAA membership, you may consider Geico. Its average rates are $308 lower than the national average and the second lowest in our study. Allstate is the most expensive insurer for low-mileage auto insurance, with an average rate $911 higher than Geico.
Here are the cheapest companies for low mileage car insurance:
It is important to remember that low mileage rates vary and often depend on national insurance regulations. For example, low-mileage drivers in California can save more than their counterparts in other states. That’s because California law requires car insurance companies to consider estimated annual mileage costs when setting premiums. The best way to find cheap, low-mileage auto insurance is to get free quotes from auto insurance companies licensed to sell coverage in your state.
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According to 2020 data from the US Federal Highway Administration, the average driver drives just over 14,200 miles per year, or about 1,183 miles per month. If you drive less than average, you may be considered a low mileage driver.
The definition of “low mileage” varies by insurer, as do discounts. If you think you might qualify for a low-mileage discount or incentive program, contact your insurer (or more, if you’re shopping around) to find out. Keep in mind that some insurers limit eligibility to drivers who have held a policy for a certain number of years or reached a certain level of mileage.
There are several variables that play into your auto insurance premiums, including mileage. In general, drivers who spend more time on the road have higher premiums. If you drive less, you may qualify for lower rates. How much you save depends on your driving record, your location, your insurer, and any available low mileage discounts, plans, or programs.
According to our data, drivers who average 6,000 miles per year pay about $48 (3%) less than drivers who average 12,000 miles per year. However, you may still be able to lower your rate with:
- Discounts for low mileage
- Usage-Based Insurance (UBI) Programs
- Pay-per-mile policies
Most auto insurance companies offer discounts on auto insurance policies based on eligibility, with some offering specific discounts for low-mileage drivers. If you don’t add a lot of miles to the odometer each year, it’s worth calling your insurer to see if they offer discounts for policyholders who drive less than a certain number of miles each year.
Among the insurers included in our ranking, USAA, State Farm and American Family all offer low mileage discounts that can help lower your premiums. There are also several other insurers that offer discounts to keep mileage down, although they didn’t make our ratings of the best car insurance companies of 2022 or the cheapest car insurance companies of 2022. Those These include Farm Bureau, The Commerce Institute, PEMCO Mutual and Safeco.
Usage-based auto insurance (UBI) programs use a telematics device or app on your phone to monitor your driving habits. Every program is different, but most auto insurance tracking programs base your rate on things like mileage, in-car phone use, braking habits, speed, and other behaviors that can increase or decrease the risk of an accident.
What usage-based insurance options do low-mileage drivers have?
Many insurers, including several in our 2022 cheapest car companies ranking, offer usage-based car insurance options.
There are other UBI programs available, including those offered by insurers not listed in our ratings. For example, Liberty Mutual is offering up to 30% off through its RightTrack program. Similarly, Root Insurance says customers can save up to $900 a year by downloading and using a smartphone app that tracks driving data.
It’s important to note that not all usage-based programs offer discounts for low mileage, even though they track distance traveled. Before signing up for a program, check to see if mileage is tracked and whether or not it’s factored into your rate. Also, while a UBI program may result in lower rates, a discount is not guaranteed. Always check with your insurer to see if your rates may increase based on data from telemetry devices.
If you’re considering a UBI policy, shopping around and comparing companies can help you find an insurer and program that fits your needs.
Kilometer insurance is automobile coverage based on the number of kilometers driven. In most cases, pay-per-mile plans also include a base rate. Total costs vary depending on factors such as the type of vehicle, your age and your driving history. Pay-per-mile policies tend to include comprehensive coverage, meaning the policy includes collision, comprehensive, bodily injury, and property damage coverage.
Additionally, many pay-per-mile car insurance plans limit the number of miles you pay in a day. Everything after that is free, which means you can still take road trips without worrying about paying a higher premium.
What Pay-Per-Kile Insurance Options Do Low Mileage Drivers Have?
While several insurers have added usage-based options to their coverage portfolio, fewer offer a true pay-per-kilometre insurance option. It’s also important to note that pay-per-mile plans are state-restricted, so coverage isn’t always easy to find. Among the insurers in our ranking, only two offer coverage per kilometer: Allstate and Nationwide.
Allstate’s Milewise charges a daily rate, which is adjusted every six months upon renewal. In addition, drivers also pay a rate per kilometer which is adjusted weekly based on driving data from the previous four weeks. According to Allstate projections, drivers who drive an average of 1,000 to 10,000 miles per year can save between 20% and 72% on coverage.
Nationwide’s SmartMiles policy works the same way as Allstate’s per-mile policy. Each month, drivers pay their base premium plus a cost-per-mile rate based on the previous billing cycle’s mileage. According to Nationwide, the average SmartMiles driver saves 25% over traditional fares. Additionally, SmartMiles drivers can also get a 10% discount if they adopt safe driving habits.
There are other insurers that focus exclusively on pay-per-kilometre coverage. Both Metromile and Mile Auto offer mileage-based insurance coverage that combines a base rate with a per-mile rate, allowing low-mileage drivers to spend less on auto insurance.
If you are considering these options, note that they are only available in a handful of states. At the time of publication, Metromile is only available to drivers in Arizona, California, Illinois, New Jersey, Oregon, Pennsylvania, Virginia and Washington. Mile Auto coverage is only available in Arizona, California, Georgia, Illinois, Ohio, Oregon and Texas.
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