Low-mileage car insurance applies to vehicles that aren’t driven very far or very frequently. There can be any number of reasons for this. Maybe you’re retired. Maybe you rely on public transportation or your own two feet. Maybe you prefer to rely on rideshare services such as carpooling, Uber, or Lyft. Whatever the reason, if you’re not driving, then you shouldn’t have to pay more for car insurance. At the same time, you do not want to be uninsured either.
Am I a Low-Mileage Driver?
According to the United States Federal Highway Administration, as of 2018, the average driver travels a little less than 13,500 miles per year. That’s roughly 1,125 miles per month. However, that’s also the national average, so it factors in driving habits across all ages, genders, and states. The mileage rate may be higher or lower depending on your life circumstances, which means that insurance policies can change too.
When car insurance companies offer you a rate, it’s usually based on the standard national average. However, you might be able to get discounts by being a low-mileage driver. In general, low-mileage drivers are people who drive less than 7,500 miles per year. That’s not a hard line, and some insurers use a different number. Additionally, many drivers may not be eligible for a low-mileage discount until they’ve been with their insurance company for a certain number of years or they’ve hit a certain level of mileage.
Is Car Insurance Cheaper if You Drive Less?
The answer is both yes and no.
Low-mileage insurance is complicated. There are ways to save money by driving less, but several variables play into that, including on a state-by-state basis and between insurance companies. Because of that, the best car insurance for low-mileage drivers varies.
Cheapest Low-Mileage Car Insurance
In our study, USAA offers the lowest representative rate for a driver profile with low-mileage car insurance, while Nationwide is the most expensive insurer for low-mileage car insurance, with a study rate that's more than $1,000 higher each year than USAA.
These are the cheapest companies for low-mileage car insurance:
- USAA: $829
- Geico: $1,107
- State Farm: $1,114
- Travelers: $1,226
- American Family: $1,342
- Progressive: $1,368
- Farmers: $1,670
- Allstate: $1,836
- Nationwide: $1,849
One major point to keep in mind is that insurance regulations vary by state. For instance, a low-mileage driver in California is likely to save more money than a low-mileage driver in New Jersey. That’s because California law mandates that insurers consider estimated annual mileage costs when setting premiums.
For example, in New Jersey, the average driver profile spends around $1,624 on car insurance if they are driving less than 6,000 miles. That’s not significantly different from the average representative cost of $1,663 at 12,000 miles. In California, on the other hand, the average driver profile spends around $1,489 if they’re driving less than 6,000 miles and around $1,793 if they’re driving 12,000. This means a low-mileage driver profile in California could save around $300, as compared to $39 in New Jersey.
One of the first things you’ll want to do is check the car insurance rates available to you in your state.
A Snapshot of Our State Insurance Buying Guides
Select a State
- District of Columbia
- New Hampshire
- New Jersey
- New Mexico
- New York
- North Carolina
- North Dakota
- Rhode Island
- South Carolina
- South Dakota
- West Virginia
How We Found the Cheapest Car Insurance Companies
At U.S. News, we’re all about helping people make life’s important decisions. Our college rankings, launched in 1983, set the standard in educational rankings. Our rankings in other fields, like healthcare, government, and the automotive sphere, help people and thought leaders make choices that make lives better. Now we’re continuing to empower you with the information you need to make the right choices for your life with our Cheapest Car Insurance Rankings.
Our Study Rates
For this study, U.S. News worked with Quadrant Information Services to analyze a report of insurance rates in all 50 states from the nine largest national car insurance companies, though not every company operates in every state. Quadrant obtained publicly available rate data that car insurers file with state regulators. Our study rates are based on profiles for both male and female drivers aged 25, 35, and 60. Vehicles used include the 2015 Honda Civic, 2015 Toyota RAV4, and 2015 Ford F-150, with annual mileage ranging from 6,000 and 12,000. Three car insurance coverage levels were used, as were credit tiers of good, fair, and poor. Clean driving records and records with one accident, one speeding violation, and one DUI were also used in the calculations of certain driver archetypes.
To get the study rates shown here, we computed the mean rate for male and female drivers aged 25, 35, and 60 who drive 15,000 miles per year and have medium coverage, good credit, and a clean driving record. The rates shown here are for comparative purposes only and should not be considered “average” rates available by individual insurers. Because car insurance rates are based on individual factors, your car insurance rates will differ from the rates shown here.
Low-Mileage Car Insurance Discounts
Another major point pertains to the insurance companies themselves. Rates vary significantly between different auto insurers. We’ve listed a few of the more well-known insurers, as well as the possible deals they offer to low-mileage drivers.
The United Services Automobile Association (USAA) offers an annual low-mileage discount depending on the number of miles you drive in a year. Note that this discount is restricted to drivers aged 29 and older.
The Commerce Institute offers an Annual Mileage Discount for well-qualified drivers that meet certain criteria. It’s based on the number of miles you drive in a year and is highly variable depending on your personal circumstances.
If you drive fewer than 8,000 miles annually, you may qualify for a low-mileage discount from PEMCO or Safeco. Additionally, Safeco caps this car insurance discount at 20%.
Many insurance companies, such as Farmers Insurance, Progressive, Nationwide, and Geico, do not advertise a discount for low-mileage drivers. However, that doesn’t mean you can’t get a lower rate or a discount by driving less. For instance, in New York, our study found that sample Geico policyholders had around $158 in savings when driving dropped from 12,000 to 6,000 miles annually.
Another option many insurance companies offer is usage-based insurance.
What Is Usage-Based Insurance?
Many insurers now use telematics devices. You can attach these to your vehicle or, in some cases, download them as an app on your phone. The device then monitors your driving performance. Exactly which factors it considers vary by car insurance company, but it generally counts safe driving behaviors, such as natural braking, following the speed limit, and not using your phone. It also accounts for the number of miles you drive.
Keep in mind that mileage is only one factor in these types of insurance plans. While infrequent or short-distance driving may lower rates or grant discounts on your car insurance, it is not guaranteed.
What Usage-Based Insurance Options Do Low-Mileage Drivers Have?
Many insurance providers have usage-based car insurance options. It’s worth comparison shopping to see which insurance best matches your needs.
American Family uses an app for their KnowYourDrive system. It will track various aspects of your driving behavior, including braking, speeding, and miles driven. Using it can save you up to 20% on your car insurance premiums.
Allstate offers Drivewise. It’s another telematics system that monitors driving habits such as miles driven and the time of day you drive, and it uses that to help you save between 10% and 30%.
Esurance provides an app called DriveSense. New customers could save up to $100 off their premium, and people who already have Esurance could have savings up to 8% off the rest of their policy term.
Geico’s DriveEasy works in much the same way. The amount you save varies depending on your driving habits, but Geico claims some drivers can save around 20% per month off their insurance premiums.
Liberty Mutual offers RightTrack. You download this telematics device as an app, install the sticker on your windshield, and link the two. Then RightTrack tracks your driving patterns, including how many miles you drive, and uses that data to get you savings of up to 30% off your insurance policy.
Nationwide has a usage-based insurance option called Smartride. You can get it as either an app or a telematics system to install in your vehicle. It measures nighttime driving, fast acceleration, hard braking, and the number of miles you drive to give you discounts up to 40%.
Progressive’s usage-based insurance is called Snapshot. Available as either an app or a plug-in device, Snapshot provides insured users with an average discount of $145.
Root Insurance uses a smartphone app as well. It considers factors such as miles driven, the speed of turns taken, and braking. Unlike many other companies, Root requires you to take and pass a test drive before they will agree to insure your vehicle. Root claims savings of as high as 52%.
State Farm’s Drive Safe & Save combines an in-car telematics device State Farm will send you along with a smartphone app. You can get a discount of up to 30%. Keep in mind that any discounts with Drive Safe & Save include any mileage-based premium reduction from State Farm’s normal low-mileage policy.
Alternatively, some drivers may consider a pay-per-mile auto insurance policy.
What Is Pay-Per-Mile Insurance?
Rather than having an extensive car insurance policy, some drivers may find it advantageous to consider other coverage options. One such insurance is pay-per-mile insurance coverage, which is based on the number of miles you drive. In most cases, pay-per-mile plans also feature a base rate. This payment tends to vary based on factors such as the type of vehicle, your age, and your driving history. Pay-per-mile coverage tends to include full coverage, meaning that collision, comprehensive, bodily injury, and property damages are still covered under this insurance plan.
Additionally, many pay-per-mile car insurance plans cap the number of miles that you pay for in a day. Anything after that is free, meaning you can still take road trips without worrying about having to pay a higher premium.
What Pay-Per-Mile Insurance Options Do Low-Mileage Drivers Have?
There are a handful of car insurance companies that offer pay-per-mile insurance. They’re strictly state-limited, although most of them are working to expand availability in other regions.
For its insurance policy, Metromile charges a monthly base rate and a few cents for every mile you drive, up to 250 miles per day (150 in New Jersey). Mileage after that is free if it’s during the same day, so you don’t have to give up the occasional road trip. Metromile reports drivers with their insurance have average savings of $741 per year. As of this writing, Metromile is available in eight states. However, they sell their technology to other car companies, so it may be worth checking with your own insurer about an option to pay per mile.
Mile Auto charges a monthly base rate, plus a few cents for every mile driven. Unlike other companies, Mile Auto does not require you to install anything in your vehicle. You don’t even have to download an app. Instead, you take a picture of your odometer and send it to them at the end of the month. As of this writing, Mile Auto is available in three states: Oregon, Illinois, and Georgia.
Allstate offers pay-per-mile insurance coverage called Milewise. It uses both a mobile app and a device installed in your car’s diagnostic port that Allstate sends to you. You pay a base daily rate and a second pay-as-you-drive rate. As of this writing, Milewise is available in 13 states
Nationwide’s SmartMiles program charges a base rate, plus a variable rate that you pay as you go, depending on how many miles you drive. It counts the first 250 miles you drive per day. Most vehicles produced after 1996 can qualify for SmartMiles, although some hybrids or diesel-powered vehicles may be incompatible with the device. As of this writing, SmartMiles is available in 21 states and the District of Columbia.
The Best Car Insurance Companies in 2020
Our Car Insurance Ranking
The Cheapest Car Insurance Companies in 2020
Average Annual Rates:
- USAA: $885
- Geico: $1,168
- State Farm: $1,234
- Travelers: $1,267
- Progressive: $1,373
- American Family: $1,391
- Farmers: $1,682
- Nationwide: $1,864
- Allstate: $1,880