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Does my annual mileage affect my car insurance?

How mileage affects car insurance and how to save based on your mileage

If you keep your miles under 8,000 to 10,000 a year, you might qualify for car insurance savings up to 50%, depending on the type of discount or policy. However, not all car insurance companies use mileage as a rating factor, and you could see higher premiums if you bump over the standard 12,000 miles a year. The good news: you can maximize your car insurance premium for the mileage you drive.

How does mileage affect my car insurance?

Car insurance rate hikes for driving more than average aren’t typically steep, but you could save huge on your premiums if you stay under a certain mileage for the year.

Low mileage

For companies that give a low mileage discount, the standard cutoff is around 8,000 miles a year. It’s common for insurance companies to offer a tiered discount for low mileage. For example, driving a car 1,000 miles annually would result in a greater discount than driving it 7,500 miles.

The discount amount varies by company, but 10% to 20% is the normal range. This discount is applied to the specific vehicle’s rates, meaning it wouldn’t affect another vehicle that drives over 8,000 miles.

However, if you switch to telematics car insurance, you could save anywhere from 30% to 50% on your premiums. A telematics policy tracks your driving and sets rates based on your mileage or driving habits. Some telematics policies may save you money even if you drive around 10,000 miles a year.

High mileage

Most companies set base rates for driving between 8,000 and 12,000 miles a year. If you drive more than that, there could be a surcharge added to your rates. This is because there’s a greater chance you’ll be involved in an accident if you’re on the road more.

If a company does apply a surcharge for high mileage, it’s usually a much lower percentage than the low mileage discount. Most insurers will charge in the 5% to 10% range for driving more than you’d expected.

How much can I save on car insurance with lower mileage?

Drivers who cut their annual miles driven from the average of 12,000 a year to 2,400 a year could stand to save $600 a year on their car insurance policy, according to a 2020 report from the Consumer Federation of America.

Or by going with a telematics car insurance policy, you could save $400 to $650 a year, or $33 to $54 a month. This savings is based on the policy’s typical 30% to 50% lower rates than the average $1,300 annual premium.

Compare car insurance for low-mileage drivers

Name Product Gap insurance Homeowner discount Telematics Has an app? Available states
loan/lease coverage
All 50 states & DC
Discover coverage that’s broader than competitors, valuable discounts up to 30% off and perks like shrinking deductibles that reward no claims.
Telematics only
Available in 31 states
Track your driving to receive a low rate that reflects your driving skills, and enjoy a fully app-based policy experience.
All 50 states
Your dedicated agent can help you find the best savings with multiple discounts and rewards programs.

Speak to an agent: 877-526-1527

Liberty Mutual
All 50 states & DC
Earn free accident forgiveness after five years claims-free and customize your policy anytime.

Speak to an agent: 877-336-0538


Compare up to 4 providers

Why do car insurance companies look at mileage?

In the simplest terms: The more you drive, the greater likelihood you’ll get in an accident.

Insurance companies use historical data and predictive modeling to project future losses and accidents. They suggest people who drive more miles have a greater chance of being in an accident. For example, drivers in cities are more likely to get into an accident due to the greater number of cars on the road.

What is predictive modeling?

Predictive modeling is a tool used in analytics and statistics that’s designed to help predict future events or the likelihood of those events. It has existed for a long time and is a natural part of analytics, but its recent application in insurance has evolved alongside more powerful computers.

Predictive modeling in insurance is essentially a set of computer programs that uses as much data as possible to predict future patterns. It looks at what happened in the past and uses that information to determine how likely certain things are to happen — such as how likely it is for cars that have a low annual mileage to get in an accident. Insurance companies then use these results to help determine rates and discounts.

How to get cheap car insurance for any mileage

If you can’t get the low mileage discount, there are still a few things you can do to lower your insurance premiums:

  • Switch companies. You can consider another company that doesn’t use mileage as a rating factor, offers the best deal for your mileage or rewards you for driving less, depending on your situation.
  • Be a defensive driver. If you drive a lot, set your insurer at ease with your driving and nab a discount with a defensive driving course.
  • Low mileage discount. Update the annual mileage on your policy to land this discount.
  • Try telematics. You could consider enrolling in your company’s telematics or pay-per-mile program. While low mileage is a factor in your score, how fast you accelerate and brake are heavily rated factors that could earn you a high discount.

Bottom line

Your annual mileage is another factor used by car insurance companies to help set rates, but not all companies use it. You could save up to 20% or more by having a low mileage car. But if you put a lot of miles on your vehicle each year, you may want to consider finding a company that doesn’t use mileage in its rating system.

To find the best rates and discounts for your car, compare different car insurance companies.

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