How Annual Mileage Affects Car Insurance Rates | Save Money by Driving Less

How many miles do you drive in a year? If you think this question is irrelevant to your car insurance, think again. Your annual mileage is one of the factors that can affect your car insurance rates significantly. The more you drive, the more you pay. The less you drive, the more you save.

Annual mileage is the number of miles you drive in a year. It reflects your driving habits and your exposure to risk on the road. The average annual mileage in the U.S. is about 13,500 miles, according to the Federal Highway Administration. However, this number can vary widely depending on where you live, how old you are, and what gender you are.

In this article, we will explain how annual mileage affects car insurance rates and how you can save money by driving less. We will also provide some tips on how to keep track of your annual mileage and how to compare car insurance quotes based on your mileage.

How Annual Mileage Affects Car Insurance Rates

Car insurance companies use mileage brackets to determine your rates based on your risk level. The more miles you drive, the higher your risk of getting into an accident or filing a claim. Therefore, you will pay more for car insurance. Conversely, if you drive fewer miles, you have a lower chance of being involved in a crash or making a claim. Therefore, you will pay less for car insurance.

Insurance companies tend to have different mileage brackets and discounts for low-mileage drivers. Some insurers offer discounts for driving less than 10,000 miles per year, while others may require less than 7,000 or 5,000 miles per year to qualify. The amount of the discount can also vary from 5% to 15% or more.

Some examples of common mileage brackets and discounts offered by different insurers are:

• GEICO: Up to 15% discount for driving less than 7,500 miles per year
• State Farm: Up to 30% discount for driving less than 7,500 miles per year
• Progressive: Up to 10% discount for driving less than 10,000 miles per year
• Allstate: Up to 20% discount for driving less than 12,000 miles per year

Another option for low-mileage drivers is to opt for pay-per-mile or telematics insurance plans. These plans charge you based on how much you actually drive and how well you drive. You pay a base rate plus a per-mile rate or a variable rate depending on your driving behavior. You can track your mileage and performance through a device installed in your car or an app on your phone.

Some examples of pay-per-mile or telematics insurance plans are:

• Metromile: Pay-per-mile insurance that charges a base rate plus a per-mile rate (typically between 4 cents and 8 cents) depending on your age, location, vehicle type, and credit score
• Nationwide SmartMiles: Pay-per-mile insurance that charges a base rate plus a per-mile rate (typically between 4 cents and 10 cents) depending on your driving record, vehicle type, and coverage level
• Root: Telematics insurance that charges a variable rate based on your driving behavior, such as braking, speed, cornering, and time of day

The pros of pay-per-mile or telematics insurance plans are that they can save you money if you drive very little or very well. They can also encourage you to drive safer and greener by rewarding good driving habits. The cons are that they can be more expensive if you drive more than expected or poorly. They can also raise privacy concerns as they monitor your driving data.

How to Keep Track of Your Annual Mileage

It is important to estimate your annual mileage accurately and honestly when applying for car insurance. If you underestimate your mileage, you may end up paying more than you should or face surcharges or penalties if your insurer finds out. If you overestimate your mileage, you may miss out on discounts or savings that you deserve.

To calculate your annual mileage, you do not have to track every mile you drive – an estimate is usually good enough. You can use the following steps to estimate your annual mileage:

• Determine how many miles you drive daily for work or school by multiplying your one-way commute distance by two
• Add some extra miles for errands and side trips that you make regularly
• Multiply the daily total by the number of days you drive per week
• Multiply the weekly total by the number of weeks you drive per year
• Add some more miles for occasional trips that you make for vacations, holidays, or emergencies

For example, if you drive 10 miles one way to work, 5 miles for errands, and 20 miles for a weekend trip, your daily total is 25 miles and your weekly total is 145 miles. If you drive 48 weeks per year and take two trips of 500 miles each, your annual mileage is 7,460 miles.

Some insurance companies may ask you to provide proof of your annual mileage, such as a photo of your odometer, a service record, or a mileage log. Some may also ask you to report your mileage periodically or use a device or an app to track your mileage. If you fail to report your mileage accurately or honestly, you may face consequences such as:

• Paying a surcharge for each additional mile driven above your limit
• Losing your discount or eligibility for a low-mileage plan
• Having your policy canceled or non-renewed
• Being accused of insurance fraud

How to Save Money on Car Insurance by Driving Less

One of the easiest and most effective ways to save money on car insurance is to drive less. By reducing your annual mileage, you can lower your risk level and qualify for discounts or savings from your insurer. You can also save money on other car-related expenses, such as maintenance, fuel, and repairs.

There are many ways to reduce your annual mileage, such as:

• Carpooling with coworkers, friends, or family members who have similar destinations or schedules
• Taking public transportation, such as buses, trains, subways, or light rail
• Working from home or telecommuting if your employer allows it
• Combining trips or planning ahead to avoid unnecessary driving
• Walking or biking for short distances or for health and fitness

Driving less can also benefit your car and the environment. By driving less, you can:

• Extend the lifespan of your car and its components by reducing wear and tear
• Improve your gas mileage and reduce your fuel consumption by avoiding traffic and idling
• Reduce your carbon footprint and greenhouse gas emissions by burning less fossil fuels
• Improve the air quality and reduce noise pollution by emitting less exhaust and noise

If you want to save even more money on car insurance, you should also compare quotes from different providers based on your annual mileage and driving habits. Different insurers may have different criteria and rates for low-mileage drivers. You should shop around and compare coverage options, discounts, and prices to find the best deal for your needs.

Conclusion

Annual mileage is one of the factors that can affect your car insurance rates significantly. The more you drive, the more you pay. The less you drive, the more you save.

By driving less, you can lower your risk level and qualify for discounts or savings from your insurer. You can also save money on other car-related expenses, such as maintenance, fuel, and repairs. You can also benefit your car and the environment by reducing wear and tear, fuel consumption, and emissions.

To estimate your annual mileage accurately and honestly, you should use a simple formula based on your commute, errands, and trips. You should also keep track of your mileage and report it to your insurer if required. You should avoid underreporting or overreporting your mileage as it may lead to surcharges, penalties, or policy cancellation.

To find the best car insurance deal for your annual mileage and driving habits, you should compare quotes from different providers. You should shop around and compare coverage options, discounts, and prices to find the best deal for your needs.

If you want to save money on car insurance by driving less, start today. Check your annual mileage and see how much you can save by reducing it. Compare car insurance quotes from different providers based on your mileage and find the best deal for you.