Getting A Low Mileage Discount On Your Car Insurance

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Rachel Bodine graduated from college with a BA in English. She works as an associate editor and writer for for over a year and enjoys creating content that offers expert advice on car insurance topics.

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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...

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Reviewed byLeslie Kasperowicz
Former Farmers Insurance CSR

UPDATED: Mar 13, 2020

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As we all know, the higher risk you are to insurance companies, the higher your auto insurance premium will be.  Because of this, it makes sense that the less amount of time you spend behind the wheel of your car, the cheaper your insurance rates end up being.  After all, if you drive less, you are less likely to get into car accident, less likely to have your car vandalized, and less likely to get your car stolen. Therefore, insurers in the United States often give out low-mileage discounts and/or usage based discounts, which reward drivers who do not drive that much.

How And Why The Low Mileage Discount Works

Many people simply do not drive that much.  A lot of us have very short commutes.  Some of us prefer to take public transportation on certain days. Others prefer to ride bicycles because it’s good for the environment and is good exercise. Many of us like to take breaks from driving from time to time.  The low mileage discount can be taken advantage of by people in many different situations.low mileage discount

Let’s say you recently moved closer to work.  Maybe you gave up your big house in the suburbs for a smaller apartment in the city to lower your commute time.  You used to drive your car 50 miles per day, in traffic.  Now, you walk to work and basically only use your car on the weekends.  In cases like this, it’s best to call up your insurance agent and ask for a low mileage discount.

Groups Of People Most Likely To Benefit From Low-Mileage Discounts

These groups often see the biggest drops in mileage and therefore should inquire immediately about low-mileage discounts:

  • Senior citizens – If you are recently retired or are now working less hours, you will see a significant drop in commuting time.  Not needing to drive to and from work means that you will drive a lot less miles annually.
  • Car Poolers – If you recently joined a car pool to get you to and from work, school, or any other place you go to daily, you will naturally drive less miles.
  • People who moved – Moving to a more convenient location, such as a neighborhood with subway and bus stops will cut back on the time you spend driving.
  • Students – If you are a teenage driver whose parents only allow you to drive your car to school and back, make sure you let your insurance company know this!  Teens often have the highest car insurance rates because they are such risky insures, so finding any way to save is important.
  • Secondary car owners – If you buy another car to drive only on weekends, or that you drive when you are not working, your driving time for your primary car will certainly decrease.  You should let your insurance company know immediately if you purchase a second vehicle.

A recent study by Quadrant Information Systems found that people who drive 5,000 miles annually pay over 8% less on their yearly car insurance rates than people who drive 15,000 miles annually.  If you are thinking, “there’s no way I drive 15,000 miles a year, this doesn’t concern me,” think again: the average American driver drives around 13,500 miles per year.  If you spend any significant amount of time behind the wheel, chances are that your annual mileage is getting up there.

States That See The Biggest Discounts

Like stated above, there is an average of 8% saved on insurance when a driver drives 5,000 miles as opposed to 15,000 miles.  This percentage saved varies from state to state.  Some states see greater savings than others.

These five states show the greatest low mileage discount:

  1. California – 16.5%
  2. Washington, D.C. – 11.1%
  3. Alaska – 11%
  4. Alabama – 9.8%
  5. Hawaii – 9.7%

The following states, however, did not show such a big discount for cutting back on miles:

  1. North Carolina – 0%
  2. Utah – 1.2%
  3. Texas – 2.5%
  4. Connecticut – 2.8%
  5. Rhode Island – 3%

California insurance companies most likely charge high rates to high mileage drivers because of the sheer amount of drivers on California-roads.  The more crowded it gets, and the more people clogging up the roads, the more likely they are to bang into each other.

On the opposite end of the spectrum, North Carolina drivers see the least amount of savings from driving less.  This is because North Carolina has much more rural driving that California does.  Driving on sparsely populated country roads is much safer than weaving your way in and out of traffic in Los Angeles.

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How To Take Advantage Of These Discounts

If you have been driving less recently, or have always been one of those drivers who drives less than 5,000 miles per year, it’s crucial that you contact your insurance company and ask for discounts.  A recent survey by Princeton Survey Research Associates found that only 16 percent of Americans have asked their insurer for discounts.  The same study found that only 18% of drivers ever inform their insurance company if their daily mileage changes. Remember, like most companies, insurance companies are in business to make profit.  Therefore, many insurance companies will not give you discounts unless you ask for them!

The best policy is to continually check with your insurance company to see which new discounts may be available to you.  Thousands of Americans are leaving hundreds of dollars on the table annually just because they are too afraid to ask for discounts.  Don’t let yourself be one of them!

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