Top options for finding the best car insurance for low mileage drivers include:
- Find low mileage discounts.
- Pay Per Mile Car Insurance Plans.
- Usage based car insurance programs if you are also a very good driver.
Discounts for low mileage
The less you drive, the better your chance of staying accident-free, so some auto insurance companies offer low-mileage discounts. Make sure you let your insurer know if you start driving less due to working from home, retirement or simply driving less.
The number of miles driven per year to be considered a low mileage driver varies by company. for example
- Your mileage must be 10,000 or less per year to receive a low mileage discount from car owners.
- A low mileage discount from Safeco is for those who drive less than 8,000 miles per year.
- State Auto offers a low-mileage mature driver discount if you're 65 or older and drive less than 3,000 miles a year.
Pay-Per-Mile Car Insurance
Another option for low-mileage drivers is pay-per-mile car insurance. This type of policy takes into account the actual miles you drive, giving you more control over what you pay.
A pay-per-mile auto insurance policy has a daily or monthly base rate determined by traditional rating factors such as age, credit, driver's license, location and vehicle. This rate usually stays constant, while your extra rate per mile varies based on the actual miles you drive. If you drive less in a month, your rates will go down.
Example of paying per mile: Let's say you have a base rate of $50 with your pay per mile insurance and $0.07 per mile. If you drive 400 miles per month, you'll pay a total of $78 that month (400 miles x $0.07 = $28 + $50 base rate = $78).
Most pay-per-mile auto insurance companies require you to use a smartphone app or a device included in your vehicle to track mileage. Some insurers track your mileage plus monitor and rate your driving behavior. If your driving is taken into account then your base rate will vary depending on your driving score. In that case, you'll want to demonstrate excellent driving behavior and drive fewer miles per year to get the best rates.
Auto insurance companies offering pay-per-mile programs include:
- Allstate: With Allstate's Milewise, you pay a low daily rate plus a mile rate. In some countries, driving behavior is also taken into account when calculating rates.
- Just insure: Just Insure offers pay-per-mile insurance in Arizona. In addition to mileage, Just Insure also takes driving behavior into account. It calculates a ScoreSafe rating. The better your score, the lower your cost per mile.
- Meters: Metromile only offers pay-per-mile car insurance policies that have a monthly base rate and a per-mile rate.
- Car miles: Mile Auto doesn't track miles with an app or on-board diagnostics, but instead has you submit a photo of your odometer each month. You pay for the miles traveled plus your basic fare.
- Nationwide: SmartMiles has a monthly base rate plus a variable rate per mile based on your actual miles driven.
- Noblr: Noblr is a USAA company, so you must have military membership to purchase a policy. Noblr has a flat rate plus a variable rate based on how many miles you drive and how you drive.
Usage-based insurance and telematics for low-mileage drivers
Usage-based auto insurance programs use a mobile app or device to monitor your driving behavior and allow you to potentially earn significant discounts if you demonstrate that you are a safe driver. Tracked data is used to calculate a driving score and determine your discount – if you qualify for one.
The maximum potential discount for being rated as a safe driver varies by company, but typically ranges between 20% to 40%.
Usage-based car insurance is also called telematics because it uses technology, such as your smartphone, to collect data about your mileage and driving behavior. The information that is monitored and assessed varies by insurer, but typically includes:
- Acceleration
- Abrupt stop
- Hard turn
- Kilometers traveled
- Using a phone while driving
- Speed
- Time of day the car is being driven
A risk you take with usage-based insurance is not getting a discount because of a low score or — even worse — getting higher rates with some insurers. For example, Progressive's Snapshot program can raise your rates if you are deemed to be driving at a higher risk. Progressive says rates go up for 20 percent of drivers who use Snapshot.
What usage-based insurance options do low-mileage drivers have?
There are many options for low-mileage drivers looking for a usage-based insurance program, as most leading auto insurance companies offer one. There are also auto insurance companies that only provide usage-based policies, such as Lemonade and Root.
If you want to try a usage-based insurance program, start by seeing if your current insurance company offers one and compare it to other usage-based programs.
Usage based auto insurance programs