How to Save with Low-Mileage Auto Insurance

Owning a car can be pricey. There’s the potential car payment, gas, and repairs — as well as auto insurance. 

If you don’t drive much, you might be overpaying for auto insurance. We found that traditional auto insurance is unfair for many drivers, leaving a whopping 65 percent of drivers overpaying for coverage. So what can you do? One place to start is to look for low-mileage car insurance

Here’s everything you might want to learn about insurance for low-mileage drivers, what it means, and where you can find car insurance for low-mileage drivers without breaking the bank. 

Low Mileage Car Insurance Types and Discounts | Metromile

What is considered low-mileage?

According to the U.S. Federal Highway Administration, the average American drives around 13,500 miles per year, or about 37 miles per day. While the definition can vary by insurer, many car insurance providers define “low-mileage drivers” as individuals who drive a little over half that amount — around 7,500 miles per year, or roughly 20 miles per day.

If you’re like many Americans, your driving habits probably changed because of COVID-19. In fact, Metromile customers nationwide collectively drove 30% fewer miles from April through December 2020 compared to the same period in 2019.

Whether it’s because more people are working from home or individuals are still understandably nervous about leaving their homes, one thing is clear: there are likely many more drivers now considered low-mileage — which might be good news for their wallets.

Is car insurance cheaper if you drive less?

If you don’t drive much, you might think that your car insurance will be automatically cheaper, but that’s not necessarily true. You might be overpaying for car insurance, especially if you don’t drive too far or often. That’s why it’s a good idea to compare car insurance quotes and look into auto insurance for low-mileage drivers.

A good option is pay-per-mile car insurance. With pay-per-mile auto insurance, you pay as you go. How often you use your car determines the price you pay each month for your coverage. You’ll generally pay a monthly rate to help keep your vehicle covered, even when you’re not using it. Then, you’ll pay a per-mile rate (usually a few cents) for each mile you drive.

How can I get a low-mileage discount for auto insurance?

If you’re not putting in the miles like you used to, it doesn’t make sense to pay the same rate for car insurance. Whether your insurance provider offers a low-mileage discount or savings for people who don’t drive a lot — or doesn’t — here are a few things you can try to reduce your bill:

  • Drive less. If you don’t currently meet your insurance provider’s definition of “low-mileage,” try to reduce the number of miles you drive. There are a variety of ways to do this, from asking your company if you can work from home (many businesses are more amenable to the idea thanks to COVID-19) to walking or taking public transportation more often and using Google Maps to ensure you’re driving the shortest route possible.
  • Negotiate with your current provider. If you’re already a low mileage driver, try letting your insurance company know you’re driving less and ask for a discount. Some insurance companies might ask whether you drive your car primarily for business or personal leisure or ask you to take a photo of your odometer to benefit from their savings for low-mileage drivers. 
  • Switch to pay-per-mile insurance. With pay-per-mile insurance, your rate is based on your actual driving habits, which makes it a great option for low-mileage drivers who drive less than 10,000 miles a year. At the end of each monthly cycle, you’re billed for the cost of the miles you drove over the past month — no need to alter your driving habits or proactively ask for a discount.

What types of low-mileage car insurance are there?

Low-mileage car insurance programs often use telematics, which is a type of technology to understand how you use your car. They’ll usually ask you to plug the device into your car’s on-board diagnostic (OBD-II) port, and the technology will track details such as how often you drive, how much you drive, your speed, how you brake, and your general driving habits, like whether you use your phone while driving.

Alternatively, they may ask you to take a photo of your odometer every month — though this method is less reliable.

Auto insurers then usually take one of two approaches to low-mileage auto insurance:

  • Low-mileage discounts: Some car insurance providers offer you a set discount if you drive fewer than a set amount of miles, such as 6,000 miles per year.
  • Pay per mile: Pay-per-mile insurance is usage-based and pay-as-you-go — you pay a set monthly rate, and after that, your premium depends on how many miles you drive. If you drive less, you pay less. 

How much you can save with insurance for low mileage drivers

Low-mileage drivers could cut their auto insurance bills by switching to low-mileage insurance such as Metromile.

* Average annual car insurance savings by new customers surveyed who saved with Metromile in 2018.

The bottom line

More and more drivers are becoming low-mileage drivers, and chances are you might be a low-mileage driver who could save with Metromile and pay-per-mile auto insurance.

Metromile has savings built into its pay-as-you-go auto insurance. Drivers don’t need to let us know or prove that they’re a low-mileage driver because they pay per mile. Your bill will go down automatically if you’re driving less in almost real-time, so there’s no need to call in or negotiate.

You can try out whether usage-based insurance is right for you for free with Ride Along™. Download the Metromile app onto your phone and get a free auto insurance quote. Then, drive like you usually do for about two weeks. (You should keep your current insurance coverage during the trial to stay covered.)

During your trial, we’ll use your driving habits, including how many miles you drive, to show you your potential savings — which can be significant. On average, our customers save 47% compared to what they were paying their previous auto insurer.

You pay gas by the gallon, why not the insurance by the mile? Check out Metromile per-mile car insurance today.

* Average annual car insurance savings by new customers surveyed who saved with Metromile in 2018.