Car insurance options for low-mileage drivers

How many miles a year is considered low mileage?

Each auto insurance company sets thresholds for low-mileage discounts. Often, there are tiers. According to John Espenschied, agency principal at Insurance Brokers Group, insurance companies may characterize 7,500 annual miles driven as low mileage. But someone who drives 3,000 miles a year often gets a larger discount than another driver who drives 7,000 miles annually.

You can also define low mileage as being less than the average miles driven. Average miles driven is estimated at roughly 11,000 to 14,000, depending on the source. Kelley Blue Book estimated the 2023 average mileage at 12,200 miles, based on total miles driven divided by the number of drivers. The Federal Highway Administration reported 11,106 average miles traveled by light-duty vehicles in 2023.

How is mileage tracked?

There are five ways an insurance company can track your mileage.

1. Odometer photos. To maintain a low-mileage discount on standard insurance, you may need to submit photos of your car's odometer reading once a year or every quarter.

2. Service records and claims. Auto dealers, oil change providers, and independent service shops may report work on your vehicle and odometer readings to national databases. Espenschied noted that insurance companies can access that data to determine how much you drive.

3. Device installed in the car. Some insurance companies provide a device that plugs into your car's diagnostic port. The ports may be located under the steering wheel, near the center console, or under the dashboard. You can check your owner's manual to find the exact location.

4. Connected car. Some modern vehicles have built-in technology that collects data on your driving and sends it to your insurance company. For example, some Toyotas made in 2018 or later can share driving data with Nationwide.

5. Smartphone app. You may have the option to use a mobile app that automatically detects when you're driving and records mileage and other data.

Who might want low-mileage insurance

You may be a candidate for low-mileage insurance if:

• You work from home.

• You are retired.

• You have multiple cars.

• You live in a walkable city.

• You favor public transportation or bicycle riding over driving.

In short, if you don't drive a car daily or take long trips, low-mileage insurance may be an option.

How much does car insurance cost for low-mileage drivers?

Espenschied estimated that driving less than 7,500 miles annually can lower insurance premiums by 5% to 15%, depending on the state and the insurer.

Mileage example

The table below shows how monthly insurance premiums can vary by annual mileage across different insurance companies. Quotes assume full coverage and a clean driving record.

1. Know your mileage. You can estimate your annual mileage by checking your odometer weekly during three or four weeks of normal driving activity. Calculate your average weekly miles and multiply by 52 to approximate your annual miles driven.

2. Ask your current provider. Contact your insurance company and ask if there is a low-mileage discount available. You may need to prove you don't drive much, with dated photos of your odometer. Ask your provider what information you'll need to provide and when the discount can take effect.

3. Use a safe-driving app. Install a safe-driving app like Hum and use it to evaluate your driving habits. If the app gives you a good safety score, consider getting a quote for usage-based insurance. UBI is not advisable if you have risky driving habits, since it may cost more than standard insurance.

4. Shop other providers. Your current insurance company may not have a low mileage discount, or the discount may not be competitive. To get the best rates, gather quotes from other companies. Look into standard coverage with discounts, pay-per-mile insurance, and — if you are a safe driver — usage-based insurance. Note that some online quoting tools may not request or consider your annual mileage. In that case, follow up with a broker or agent to ask about a mileage discount.

Read more: How to get all the best car insurance discounts

Low-mileage car insurance FAQs

Is car insurance cheaper if you drive less?

Car insurance may be cheaper if you drive less, depending on your car insurance company and where you live. Each insurance provider decides how important annual mileage is as a pricing factor in car insurance rates. Some treat it as a minor factor, and others weight it heavily.

How much cheaper is low-mileage insurance?

The potential savings for low-mileage driving can be 5% to 15%, according to Espenschied, of Insurance Brokers Group.

Are hybrids good for low-mileage drivers?

Hybrid cars deliver the biggest fuel efficiency gains in city driving conditions. On longer drives at steady speeds, hybrids rely more on fuel than electricity. Therefore, hybrids are suitable for low-mileage drivers who take short trips in urban areas but are less efficient for low-mileage drivers who only take occasional highway trips.

What mileage is the cheapest for insurance?

"There is not one cheapest mileage for insurance, but generally, the fewer miles you drive, the bigger the savings," said Espenschied. In other words, those who drive less than 3,000 miles per year can earn larger discounts than those driving 7,000 miles annually.