Many car insurance companies will lower your rates, not raise them, for categorizing a car as a pleasure vehicle. For this reason, compare car insurance rates with other insurance providers to make sure you have the best car insurance for you.

What insurers use to calculate rates

Car insurance companies’ rates vary greatly because each has its own rating system that weighs risk factors differently. Risk factors looked at also differ but typically include:

  • Age
  • Gender
  • Marital status
  • Driving record
  • Claims history
  • Years of driving experience
  • Credit history (in states that allow it to be used)
  • Geographical location
  • Vehicle type
  • Vehicle use (personal or business use and how many miles driven per year)
  • Coverage types, limits and deductibles

Commuter cars typically are more expensive to insure because they are driven daily, have higher mileage and have a higher risk of being in an accident than a car you drive maybe once a month.

You may be able to categorize both of your vehicles as pleasure use since you drive because of being retired and not regularly commuting in either vehicle.

Lower rates for low-mileage and pleasure vehicles

Most car insurance providers offer a discount of 5% to 15% if you drive less than a certain amount of miles a year. This amount varies, it can be less than 7,000 miles with some insurers and less than 12,000 miles with others. 

Both of your vehicles should qualify for a low-mileage discount. If your current auto insurer doesn’t extend such a discount, it’s another good reason to look around for a new car insurance company.

For example, we ran car insurance quotes for a 68-year-old single woman who is retired and living in Lancaster, Calif. I gave her two cars, a 2009 Toyota Camry and a pleasure car — a 1988 Porsche 911. 

With coverage of $100,000 per person and $300,000 per accident for bodily injury liability and $50,000 for property damage liability on each vehicle, when you categorize each vehicle for pleasure use with an annual mileage of 3,000 for the Camry and 400 for the Porsche, the cheapest annual rate we found for the vehicles was $1,150. Changing the Camry to a commuter car with 10,000 annual miles and keeping the Porsche the same, rates went up to $1,404 a year.

Your rates will vary due to your own personal details, such as your age, the cars you’re insuring and the coverage choices you make.

Being a preferred driver gets you the best rates

Having excellent credit and a good driving record should help you become a preferred driver and get lower rates and/or discounts with many car insurance companies on top of the reduction you should receive for the pleasure use of your vehicles and their low annual mileage.

Preferred drivers are what car insurance companies look for: low-risk drivers who pay their premiums on time. Having continuous coverage going back several years will also help you get better rate quotes with multiple car insurance carriers.  You may miss out on a renewal discount with your current insurer if you switch, but that may be made up with a transfer discount with a new insurance company.

You can look at a couple of other options.

First, suppose your pleasure-use car is an older vehicle with sentimental value. In that case, you might want to consider classic car insurance, which involves getting a policy from a specialty insurer known as an agreed-value policy. They are generally inexpensive because the insured vehicle is typically used very little. 

You may even want to try a pay-as-you-drive (PAYD) car insurance program. 

With a PAYD program, a telematics device plugged into your car will monitor your driving, such as how many miles and what time of day you drive, your braking and your acceleration.  If your driving patterns show you to be a low-risk driver, you can qualify for a good discount – up to 45% with some car insurance companies.

Don’t be afraid to change car insurance companies just because you have had the same carrier for several years. Your current insurer may be stagnant with its rates and discounts for you. At the same time, another carrier would hop at the chance of offering you much lower premiums with great customer service to obtain you as a preferred driver.

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Contributing Writer

Shivani Gite is a personal finance and insurance writer with a degree in journalism and mass communication. She is passionate about making insurance topics easy to understand for people and helping them make better financial decisions. When not writing, you can find her reading a book or watching anime.