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Written by:
Prachi Singh
Contributing Writer
Prachi is an insurance writer with a master’s degree in business administration. Through her writing, she hopes to help readers make smart and informed decisions about their finances. She loves to travel and write poetry.
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Reviewed by:
Laura Longero
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Executive Editor
Laura is an award-winning editor with experience in content and communications covering auto insurance and personal finance. She has written for several media outlets, including the USA Today Network. She most recently worked in the public sector for the Nevada Department of Transportation.

Question: How does the annual mileage I put on my car impact my insurance premiums?

Answer: Some car insurance companies offer discounts to motorists who drive fewer miles. As mileage rises, at a certain point — it differs from company to company — you no longer qualify for a discount, which means your rates go up.

Car insurance premiums are set by the information you provide about your vehicle – such as the purpose for it (pleasure, commuter, work, etc.), how often you drive (to work or to school daily or if it is just a weekend car), and how many miles you put on the car each year. So, mileage is just one of the rating factors that an insurance carrier will consider.

For example, some insurance companies’ discount cutoff is 15,000; others are much lower at 7,500 and under. How you get the discount varies, too.  With some insurance companies, you estimate the mileage you put on your car each year. Other car insurance providers may offer you a discount only if they track your annual mileage. 

Other insurers offer usage-based insurance (UBI) plans that track your mileage and driving behavior with a telematics device and offer discounts. Check out PAYD plans to determine if any work for you.

Save money on car insurance if you drive less

Analysis by the Consumer Federation of America (CFA) indicates that drivers could save an average of 5% to 10% on their car insurance rates if they reduced their annual mileage. They found if you drive less than 10,000 miles annually, you could see savings of about 5% on your premium. Less driving means less exposure to situations that could result in an accident. This results in fewer claims and encourages insurers to lower rates.

You must ask your insurance company about their specific rating rules regarding this issue. Also, when shopping around for insurance, you can ask if they discount rates for 10,000, 12,000, or even up to 15,000 miles per year. 

Asking for a low-mileage discount may help you determine if you can reduce your auto insurance rates enough to make carpooling or mass transit worth the time and effort.

Penny Gusner contributed to this story.

Laura Longero

Ask the Insurance Expert

Laura Longero

Executive Editor

Laura is an award-winning editor with experience in content and communications covering auto insurance and personal finance. She has written for several media outlets, including the USA Today Network. She most recently worked in the public sector for the Nevada Department of Transportation.

John McCormick

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John McCormick

Editorial Director

John is the editorial director for CarInsurance.com, Insurance.com and Insure.com. Before joining QuinStreet, John was a deputy editor at The Wall Street Journal and had been an editor and reporter at a number of other media outlets where he covered insurance, personal finance, and technology.

Leslie Kasperowicz

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Leslie Kasperowicz

Managing Editor

Leslie Kasperowicz is an insurance educator and content creation professional with nearly two decades of experience first directly in the insurance industry at Farmers Insurance and then as a writer, researcher, and educator for insurance shoppers writing for sites like ExpertInsuranceReviews.com and InsuranceHotline.com and managing content, now at CarInsurance.com.

Nupur Gambhir

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Nupur Gambhir

Managing Editor

Nupur Gambhir is a content editor and licensed life, health, and disability insurance expert. She has extensive experience bringing brands to life and has built award-nominated campaigns for travel and tech. Her insurance expertise has been featured in Bloomberg News, Forbes Advisor, CNET, Fortune, Slate, Real Simple, Lifehacker, The Financial Gym, and the end-of-life planning service.

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Contributing Writer

Prachi is an insurance writer with a master’s degree in business administration. Through her writing, she hopes to help readers make smart and informed decisions about their finances. She loves to travel and write poetry.