If you drive fewer than 50 miles daily — or otherwise consider yourself a low-mileage driver — several usage-based car insurance options could lower your premiums. Below are a few of the most common programs and policies designed specifically for low-mileage drivers.
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- Pay-per-mile insurance is an excellent option for low-mileage drivers. You pay a base rate plus a small fee for every mile you drive, which can save you money if you don’t drive much.
- Usage-based insurance programs track your driving habits using a device or app. You could get lower rates if you’re a safe driver and drive less than 10,000 miles a year.
- Many insurers offer low-mileage discounts. Drivers who drive less than 7,500 to 10,000 miles annually might qualify for a 5% to 15% discount.
Pay-per-mile car insurance
Pay-per-mile insurance structures your premium around how many miles you drive. Instead of paying a flat rate that assumes an average annual mileage, you pay a lower base rate plus a small per-mile charge. Most companies use a telematics device (plug-in or app) to track miles driven. Others may allow you to submit odometer photos periodically.
However, these services are limited to certain states and regions. If your driving patterns change, for instance, you suddenly need to commute more, your premium may increase.
Usage-based or telematics car insurance
Usage-based insurance (often called telematics insurance) adjusts your premium based on your actual driving behavior, not just mileage. Factors like your average speed, how quickly you accelerate and the times of day you drive all affect your potential discounts.
You’ll have to install a device in your vehicle or download a dedicated app on your smartphone. The insurer collects data on miles driven, braking/acceleration patterns and driving times. After a monitoring period, the insurer offers a discount based on your driving habits.
Low-mileage discounts
Instead of paying by the mile or tracking your driving habits, some insurers will simply give you a low-mileage discount if you drive below a certain annual threshold—often 7,500 or 10,000 miles per year.
You may need to provide an estimate of your annual mileage. Some insurers may request photo evidence of the odometer or verify your mileage when your policy renews. You may qualify for a premium reduction if you stay under the mileage limit.
Final thoughts
For individuals who drive fewer than 50 miles daily, specialized insurance options like pay-per-mile, usage-based (telematics) programs and low-mileage discounts can offer substantial savings over traditional policies.
The best choice depends on your driving habits, comfort with tracking technology and willingness to adhere to mileage caps or usage restrictions. Always compare quotes from multiple insurers and review the specifics of each program to find the policy that best fits your needs and budget.
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