Car insurance rates are based on several factors that are unique to every driver. Some common examples include state, age, credit score and claim history. However, your annual mileage — the distance you drive in a given year — may also influence the cost of your car insurance. If you drive infrequently, you might be able to get a cheaper rate. Bankrate’s insurance editorial team breaks down how and why your mileage can affect your car insurance rate so you can decide what car insurance policy is right for you.


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Does annual mileage affect car insurance rates?

Yes, your average miles driven per year may have an impact on your car insurance rate. Specifically, the less you drive, the less you may be able to pay for car insurance. When you apply for coverage, whether online or through an agent, you will be asked to estimate how many miles you drive on an annual basis. The average American drives 13,476 per year, according to the Federal Highway Administration (FHA).

The reason annual mileage affects car insurance is that it predicts your risk of filing a claim. For instance, infrequent drivers often pay less for car insurance because there is a lower risk of them getting into an accident. On the other hand, if you drive 50 miles per day, your risk of a collision might increase significantly.

How average miles driven per year is calculated

You might be wondering how car insurance companies know how many miles you drive per year. Usually, they rely on the honor system. When you submit your policy application, do not lie about your annual mileage. Some insurance companies do random mileage checks during the year if your number is lower than average when you enroll. If you are enrolled in a telematics program, your insurance company may also track how many miles you put on your car.

When your policy is up for renewal, you have the opportunity to change your annual estimated mileage. If you are driving less because your circumstances have changed, contact your agent and give them an updated estimate. Your new mileage may help you get a lower premium based on the insurance company’s car insurance mileage brackets, or you could even consider switching to pay-per-mile car insurance.

How commuting impacts car insurance

Another question on most car insurance applications is what type of driving you do — pleasure, business or commuting. If your car is primarily used for commuting back and forth to work, your insurance company will need to know, as it can impact your rate.

Drivers who travel far distances to work usually pay higher car insurance premiums than drivers who travel a few miles to work. Not only are those drivers spending more time on the road, but if they are commuting into a densely populated area or city, there could be a higher chance of an accident occurring.

What is low mileage car insurance?

If you drive infrequently, you may be a good candidate for low-mileage car insurance. This type of car insurance works by tracking miles driven using a telematics device that gets installed in your vehicle, or through a smartphone app

While some car insurance companies offer mileage-based discounts, low-mileage car insurance is available as either a standalone policy or a program you can enroll in through many standard auto insurance providers.

With low-mileage car insurance, your premium is based on the number of miles you drive each month. Usually, you pay a flat monthly rate and a small per-mile-fee. Oftentimes, low mileage auto insurance is less expensive than traditional car insurance.

Here are some of the major companies that offer low mileage car insurance and mileage-based savings programs:

Will low mileage auto insurance help me save?

If you qualify for low-mileage insurance, it may help you get cheaper car insurance, especially if you are able to take advantage of additional discounts. However, a cheaper rate is not guaranteed. Only certain drivers will benefit from low-mileage car insurance.

Drivers who travel a normal distance — like commuting daily to work or school — may want to avoid low-mileage car insurance. Keep in mind that there is a flat monthly rate, plus a per-mile fee. If you are driving often, the per-mile fee can add up, making the price as expensive or more expensive than a regular car insurance policy.

Other ways to save on car insurance

There are many ways to potentially save money on car insurance. The number of miles you travel is just one of them. Here are some additional ways that drivers may be able to get a lower car insurance premium, regardless of mileage:

  • Shop around: One of the best ways to get the cheapest car insurance for you is to request and compare quotes from multiple car insurance companies. You might be surprised at how much your quoted premiums differ between insurers for the same coverage types and limits.
  • Bundling: Many insurers offer a discount if you buy multiple insurance policies with them — for example, bundling your car and home insurance typically nets one of the most significant discounts available.
  • Paperless discount: Some insurance companies may offer you a small discount if you choose to receive your bill and policy documents electronically.
  • Improve your credit score: Drivers with good credit-based insurance scores generally pay less for car insurance. Improving your credit might be an effective way to get a lower premium. (Please note that California, Hawaii, Massachusetts, Michigan and Washington prohibit or restrict the use of credit in determining auto insurance rates.)
  • Pay in full: If you can afford to pay your annual premium upfront and in full, rather than in monthly installments, some insurers may offer you a discount..
  • Organization and affiliation discounts: Some car insurance companies may offer you a discount for belonging to a specific organization — for example, being an alumni of a certain school or working for a certain employer.
  • Raise your deductible: Generally speaking, the higher your deductible, the amount you pay towards a covered collision or comprehensive claim, the lower your car insurance premium. Increasing your deductible could help you save money, but you’ll want to make sure you can afford the higher out-of-pocket cost on short notice.

Frequently asked questions

    • The best car insurance company varies for everyone. It depends on where you live, how much coverage you need, the type of coverage you need and your budget. It also depends on what you want in a car insurance company. Some companies are better than others for customer satisfaction, while others offer low average rates. Identify what’s important to you, then select a few companies to get quotes from so you can compare and decide which insurer is right for you.
    • In the United States, the average cost of car insurance is $2,014 per year, or $168 per month, for a full coverage policy. However, keep in mind that you could pay more or less based on individual factors, like your state, age, your annual mileage and the type of car you drive.
    • Yes, car insurance is required in almost every state, regardless of how often or how far you drive. If your vehicle is registered, the law requires you to carry a minimum amount of car insurance to drive legally.
    • In order to get low mileage car insurance, you may need a mobile device. Many providers require you to download a mobile app and keep your phone in the vehicle to track your mileage during trips. As an alternative, some providers will send you a physical telematics tracking device that plugs into your car, and does not require a smartphone. Keep in mind that the availability and types of telematics programs offered differ by state.
    • The answer varies depending on the insurance provider. But car insurance companies usually consider “low mileage” to be less than 7,500 miles per year. While it’s possible you may receive a discount for driving less frequently, keep in mind that the price you pay for car insurance depends on many factors, like the age of your car, where you live and your claims history.