Leslie Kasperowicz holds a BA in Social Sciences from the University of Winnipeg. She spent several years as a Farmers Insurance CSR, gaining a solid understanding of insurance products, including home, life, auto, and commercial, and working directly with insurance customers to understand their needs. She has since used that knowledge in her more than ten years as a writer, mainly in the insuranc...

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UPDATED: Oct 18, 2021

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Important facts to know...

  • Auto insurance rates are strongly influenced by how much you drive your car
  • When you drive a minimal amount of miles, you may get a low-mileage discount
  • Low-mileage discounts are applied to the vehicles that fall into a low mileage rating band
  • Most of the time, you have to drive below 3,000 miles to receive the lowest premiums for usage based factors
  • If you don’t commute to work, school or different business sites, you can pay a pleasure use rate

If you don’t use your car as much as the average person, you would think that you would pay less than the average rate for auto insurance.

Being on the road less makes you less of an exposure to loss. Since auto insurance premiums are strongly influenced by statistics and how likely someone is to file a claim, driving your car less can definitely save you money.

There’s never a time where someone would prefer to pay more money for insurance coverage that they don’t have intentions of using.

You may have to buy insurance but there are always ways to save. Compare rate quotes from top insurers side by side to find the lowest price for the coverage you need. Enter your zip code above to get started.

If your goal is to find low-cost coverage as a low-mileage user, here’s what you need to know:

How does usage factor into determining your auto insurance rates?

Usage is a major rating factor that’s used by agents to calculate premium quotes. When you’re asked about your driving habits or how far your commute is, all of the answers that you give can have a bearing on your final rate quote.

You need to be sure that you provide the right answers so that you’re not paying a high usage rate when you’re a low usage driver.

When you’re buying personal car insurance, it doesn’t necessarily mean that you’re only going to drive your car for personal errands or family trips.

Your personal car can still be used for a mixture of things like driving to and from the office or taking the kids to school in the morning.

There are three different usage classifications that a car can fall into. You must be honest when you’re giving information for quotes so that your vehicle is classified right.

If you’re not familiar with the classification groups, here’s what you should know:

  • Pleasure – individuals who drive solely for errands or pleasure trips will fall into the lowest rated classification
  • Commuting – if you drive to and from school or work, the car will be classified as a commuter car and your rate will be higher than a pleasure car
  • Business – professionals who drive to and from different offices or work sites will receive the high-cost business use classification

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Is there a different rating factor focused on mileage?

Usage isn’t the only factor that could work to your advantage when you’re a low-mileage user. If you’re driving the car for pleasure, you’ll pay less than someone who’s commuting.

Drivers who drive strictly for pleasure tend to drive less mileage than commuters. Mileage is a separate rating factor that influences your rates.

If you buy a standard insurance policy, the company is going to take a look at how much you anticipate that you’ll drive over the next six months to a year.

You don’t actually know exactly how much you’ll drive, but by projecting your mileage over the term the company can assign you a rate. Here are some of the mileage bands you can choose from:

  • Low-mileage band – usually drivers who drive less than 5,000 miles per term will receive a low-mileage discount
  • Average mileage band – drivers who drive between 5,001 and 15,000 will receive the average mileage rate
  • High-mileage band – drivers who drive over 15,000 miles each year will have a mileage surcharge

What happens if you drive more than you anticipate?

You never know how much you’ll drive each year. You might guess that you’ll drive 4,000 miles over the next year but life happens. You may make more trips to the store than you anticipated or you might end up having to take a few unexpected road trips.

If you drive more miles than you expected, it can affect your next term.

When your policy comes up for renewal, the insurance company may send you a mileage form to fill out. This form will ask you what your odometer currently reads and how much you’ll be driving over the next term.

If the carrier compares your mileage from the last term and finds out you have driven significantly more than you were rated for, you could lose your low-mileage discount.

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What could happen if you’re dishonest about your mileage?

No company is going to expect you to be spot on when you’re making an educated guess on your upcoming mileage. If there are changes in your usage, it’s important that you notify your agent immediately.

When a policyholder doesn’t make changes to their policy or their purposely aren’t honest about mileage, it can put your coverage at risk.

You should be honest and forthcoming when you’re applying for insurance. You might think that underestimating your mileage is innocent, but to the insurer, it’s a material misrepresentation.

If the company can prove you purposely weren’t honest about your mileage, they could deny future claims even if you’re paying your premiums on time.

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Can you get lower rates on your extra cars?

Low-mileage discounts are applied to vehicles on the policy and not to the entire policy. If you have one vehicle that you drive constantly, it doesn’t mean that you can’t get a low-mileage discount on other cars that you rarely drive.

If you have an extra car in your home, you should see if you can get extra discounts as well.

First off, you’ll be able to get a multi-car discount if you get insurance with the same provider. If you’re insured with a company that gives special discounts when there are more cars than drivers in the home, you may even be able to get a lower extra car rate.

What other rating factors can have an impact on your rates?

Low mileage ratings are going to help you drive your premiums down, but there are other rating factors that can have the opposite effect. You need to know what these rating factors are and how changing them really can affect your insurance budget and expense.

If you’re not familiar with personal rating factors, here’s a list of the standard factors used:

  • Driving experience
  • Age
  • Gender
  • Marital status
  • Driving record
  • Accident record
  • Credit rating
  • Mileage and usage
  • Vehicle type
  • Vehicle class
  • Garaging zip code

Is there a usage-based type of insurance that you can buy?

Standard policies just assign drivers lower rates if they drive less than the typical driver. These standard policies don’t change your rate throughout the term based on your usage.

If you wanted a specialty policy with truly usage-based premiums, you’d have to do business with a company that has a pay-as-you-go type of insurance plan available.

When you buy pay-as-you-go insurance, you’re going to sign a disclosure that says that you give the company consent to monitoring your usage at all times.

The company can require you to install a computer system in your car that tracks when, where and how you drive.

The information that’s gathered by the system installed to your onboard system lets the company give you usage-based and good driving discounts.

If you are a dangerous driver, you speed, you brake quickly, or you drive a lot of miles during busy hours, you won’t get a discount. Discounts are only for people who can show they are low-mileage users.

Low-mileage drivers might be on the road less, but they still need good quality coverage. If you’re going to cut back on your driving, you should still keep high limits to protect you just in case you get into an accident.

One way to lower the premiums that you pay without lowering your coverage is to qualify for discounts.

Take advantage of the savings and get instant quotes online now by using a comparison shopping tool. Try our free comparison tool today!