Car insurance and mileage

When you apply for car insurance, you’ll need to tell your insurer how many miles you plan to drive each year.

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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:

BandAnnual mileage estimate
10 – 1,000
21,000 – 2,000
32,000 – 3,000
43,000 – 4,000
54,000 – 5,000
65,000 – 6,000
76,000 – 7,000
87,000 – 8,000
98,000 – 9,000
109,000 – 10,000
1110,000 – 11,000
1211,000 – 12,000
1312,000 – 15,000
1415,000 – 25,000

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.

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