Car insurance and mileage

Your annual mileage can affect how much you pay for your car insurance premiums each year. This means that when you run a car insurance quote, it’s important to be as accurate as possible with your mileage estimate. If you deliberately underestimate your annual mileage, you could end up voiding your insurance policy.

Why does my mileage matter?

Car insurance premiums are based on risk. The more frequently you drive and the more miles you cover, the more likely you are to be involved in an accident and make a claim on your car insurance.This means the more miles you drive each year, the more you are likely to pay for your car insurance.

What are car insurance mileage bands?

Most car insurance providers use a system known as “insurance mileage bands” or “insurance mileage brackets” when working out your estimate. These bands are used to calculate how often you drive and your risk of being involved in an accident.

Bands may look something like below:

You will need to select the one that most closely applies to you when buying car insurance.

What is the average mileage in the UK?

The average mileage in the UK is falling each year as people choose to drive less. Department for Transport figures show that private cars travelled an average of 7,400 miles in 2019. This was down from 7,600 miles a year earlier and from 8,300 miles the decade before.

Annual mileage is likely to have dropped even further in 2020 as a result of the COVID-19 pandemic and lockdown forcing most people to stay at home.

How does mileage affect the cost of your car insurance?

This will ultimately depend on your insurer and the type of policy you have. However, a high mileage driver could end up paying around £200 more for their insurance each year compared to a low mileage driver.

Having said that, research by pay-as-you-go insurer By Miles shows that some insurance providers may spread the cost of cover for all drivers so that higher mileage motorists pay more affordable premiums. This means that lower mileage drivers could end up subsidising higher mileage drivers’ increased risk and pay more for their insurance. The figures show that motorists driving between 5,000 and 6,000 miles a year are being charged an average of £233 more than those driving 11,000 miles a year.

How to estimate your annual mileage for an insurance quote

One of the easiest ways to estimate your annual mileage is to check your annual MOT certificate. This will show the miles covered in the previous year which can help you estimate your mileage for the coming year.

Alternatively, you could look at your car’s service record. The mileage will be noted in your logbook whenever you get an annual service.

Of course, if you’re buying insurance for your first car, this won’t be possible. If that’s the case, you’ll need to work out how many miles you think you’ll drive in an average week. For example, if you drive to work, the shops or for social visits. Multiply this number by 52 to get your annual mileage.

If you plan to have a holiday or go on any other long journeys, you’ll need to add extra miles on top.

Are there specialist policies for low mileage drivers?

Yes, there are. Some insurers offer limited mileage policies that set an initial mileage limit, for example 25 miles a day, and you get a discount if you stay within this allowance.

Other insurers offer pay-as-you-go car insurance where you pay a set rate each month or year and then pay a small additional charge for each mile or hour you drive in the insurance period.

With both of these types of car insurance policy, you will usually need to have a black box or telematics device fitted to your car.

Bottom line

Annual mileage will affect how much you pay for your car insurance premiums, but a lower mileage doesn’t always correspond to lower premiums. However, it’s crucial that you’re as honest as possible with your mileage estimate when getting a quote. If your annual mileage is particularly low, you could save money by choosing a specialist policy instead.

Frequently asked questions

• Will I pay less for my insurance with lower mileage?

  In theory, yes. If you drive fewer miles, the risk of being involved in an accident and making a claim will be lower. This means you’re likely to pay less for your insurance. However, as mentioned earlier, this won’t always be the case.

  Your car insurance premium will be based on a number of different factors, not just your annual mileage. Insurers will also look at your age, your job title, where you live, the type of vehicle you drive, whether you have made any claims in the past and whether you have any motoring convictions.

  All of these factors will play a part in calculating your risk and how much you’ll pay for your car insurance. Younger, less experienced drivers or those who have motoring convictions tend to pay more for their insurance than older, more experienced drivers who have a clean driving licence.

• Can't I just guess the number of miles that I drive?

  No, it’s really important that you don’t simply guess your annual mileage. If you underestimate how many miles you drive per year and you later claim on your insurance, your policy could be invalidated and your insurer could reject your claim.

  In addition, if your insurer believes you deliberately lowered your annual mileage to get cheaper car insurance, you may find it harder to get cover in the future.

  On the flipside, if you overestimate your annual mileage, you’ll end up paying more than you need to for car insurance.

• Does mileage matter when buying a used car?

  The number of miles a used car has covered overall won’t matter when you’re buying insurance. All that insurers will be concerned about is how many miles you’re planning to drive in the coming year.

  So, if you’re buying a car with a high mileage, this doesn’t automatically mean you’ll pay more for your car insurance if you don’t plan to drive very often. Rather than focusing on the total mileage when buying a used car, it’s better to look at the overall condition of the vehicle as this could have an affect on your insurance premiums.

• What is the best annual mileage for insurance?

  There’s no clear-cut answer to this, but research by By Miles suggests that an annual mileage of 11,000-12,000 will give you the most competitive insurance quote at an average of £576.42.

  However, mileage won’t be the only factor when calculating your insurance premium, so the best way to make sure you are getting the best deal is to shop around and compare your options carefully.

• Is my insurance void if I go over mileage?

  Not necessarily. If you realise your annual mileage will be higher than you originally thought, it’s important to inform your insurer as soon as possible. Your insurer can then adjust your premiums and you’ll remain covered. However, if you don’t inform your insurer and it’s later discovered you were not honest about your mileage increase, any future claims could be rejected.

• Do car insurance companies check mileage?

  Car insurance companies won’t check your annual mileage and instead rely on motorists to provide accurate mileage estimates when taking out insurance.

  However, if you are involved in a serious accident, your insurer could ask a mechanic to assess your vehicle. As part of this, your car’s service record could be checked to see whether you have kept up with annual services, and your MOT certificate could be examined too.

  Both of these will contain details about your car’s annual mileage, which means your insurer could discover you haven’t been honest. It’s always safer not to take the risk and never hide the truth from your insurer.

• What is the lowest acceptable mileage for an insurance quote?

  Depending on the insurer, you usually won’t be able to get a quote if your mileage is less than 200 or 500 miles per year. If your annual mileage is likely to be below this, it’s worth looking for a specialist low mileage policy or a pay-as-you-go insurance policy instead.

• Is car insurance cheaper if you do fewer miles?

  Taking steps to reduce the number of miles you drive each year, such as walking more often, taking public transport or riding your bike, could help to lower your car insurance premiums.

  However, your insurance quote will be based on a range of different factors and you won’t usually see any change in your premium until you renew. That said, some insurers will offer refunds if your mileage is lower than you originally thought.