Is Car Insurance Based on Mileage or Overall Use?

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Your annual mileage will affect how much you pay for car insurance and considering this factor alone, a high-mileage driver will likely pay higher than a low-mileage driver. In addition, when buying car insurance, you may be asked whether the car is used for commuting or for pleasure, as a daily commuter will likely have more on-the-road exposure than a weekend cruiser and the insurance company will need to adjust the rate they charge you based on that.

Learn more about how mileage can affect your car insurance rates, as well as ways to save if you are a safe, low-mileage driver. There are even ways to pay for car insurance by miles driven.

Key Takeaways

  • Annual mileage can affect car insurance due to higher mileage increasing the likelihood of filing a claim because of more time spent on the road.
  • Driving over 14,000 miles per year is typically considered high mileage and can result in higher-than-average rates.
  • Insurance providers offer discounts such as good driver and anti-theft device discounts to offset high mileage premiums.
  • Mileage-based insurance includes low-mileage discounts, pay-per-mile discounts and usage-based discounts.
  • American Family and USAA are two of the few insurance carriers that offer a low mileage discount.

Does Mileage Affect Car Insurance Premiums?

Your annual mileage is an indicator to car insurance companies that tells them the likelihood of you filing a claim. You stand a higher chance of getting into an accident if you’re on the road more, for longer periods of time. Since insurance companies are taking a risk by insuring people who drive more, they will offset that risk by charging more for coverage.

Why Do Car Insurance Companies Ask About Annual Mileage and Use?

Since there is a relationship between mileage and car insurance, providing your annual mileage is usually required when getting a car insurance quote.

When buying auto insurance, you will often have to provide the insurance company with an estimate of your annual mileage and you will be charged based on that estimate and other factors like your age and accident history.

When it's time to renew your policy, you may need to give them the most current reading of your odometer. Based on the reading it’s possible that you may pay a higher rate if your actual annual mileage was higher than your estimate. If it turns out you’re an extremely high-mileage driver but you underreported your annual mileage, you may be committing car insurance fraud and your insurance company may refuse to renew your policy.

In addition, your insurance company may also ask whether the car you’re insuring is used for commuting or pleasure purposes. If you choose commuting, that tells the insurance company that the vehicle will likely be driven regularly and rack up miles. As a result, insurers may charge higher rates for a daily commuter than one driven only on the weekend.

What Is Considered High Mileage?

In general, an annual mileage that exceeds 14,000 miles is considered high by car insurance companies.[1] If you’re a high-mileage driver, then you will likely pay higher rates than a low-mileage driver, considering all other underwriting factors are equal.

Can I Get a Car Insurance Discount for Low Mileage Use?

It’s possible to get a low-mileage car insurance discount but it will usually apply when you renew your policy, not when you first buy it. Insurance companies may offer at least three opportunities to save based on your mileage: low-mileage discounts, pay-per-mile discounts and usage-based discounts.

Low-Mileage Discount Programs

Low-mileage discount programs are offered by auto insurance companies to drivers who maintain a lower-than-average number of miles on their vehicles annually. Car insurance for low-mileage drivers works by setting a mileage threshold such as 7,500 miles, although thresholds can vary by the provider.[2]

If drivers stay under this limit, they receive a discount on their insurance premiums when they renew their policy. The discount is applied to the policy upon verification of the mileage, sometimes through odometer readings or a tracking device provided by the insurer.

Pay-Per-Mile Programs

Pay-per-mile programs take the concept of low-mileage discounts further by offering a flexible insurance rate that varies with the exact number of miles driven. Drivers pay a base rate plus a per-mile fee — ideal for those who drive infrequently, such as remote workers, remote students or senior drivers.

The mileage is typically tracked using a telematics device installed in the vehicle, which reports the distance traveled back to the insurer. Some insurance companies may even require you to send a picture of your odometer each month.

This program differs from low-mileage discounts by accounting for each mile driven rather than offering a flat discount for staying under a set limit.

Usage-Based Insurance Programs

Usage-based insurance (UBI) programs consider several of your driving behaviors in addition to your mileage, such as speed, braking and time of day when the vehicle is in use. Through a device installed in the car or more commonly, a smartphone app, insurers gather data to track your driving data and lower your premiums if the data shows low mileage and safe driving behaviors.

Which Companies Offer and Low-Mileage Discount?

SmartFinancial was only able to find two providers specifically offering a low mileage discount: American Family and USAA. Neither carrier listed the discount amounts. However, we can tell you that American Family’s low mileage threshold is 7,500 miles annually. So, stay below that amount and you should receive a discount.[2]

USAA’s low mileage discount is available in most states except Hawaii and North Carolina. It’s also worth mentioning that USAA only serves active-duty military, veterans and their immediate family.

Which Companies Offer Pay-Per-Mile Insurance?

There are several providers offering pay-per-mile programs to help customers save. Below are some options to consider, as well as their availability.

Pay-Per-Mile Program


Other Notes

Nationwide SmartMiles[3]

Every state except Alaska, Hawaii, Louisiana, North Carolina, New York and Oklahoma

Receive up to 10% discount for safe driving upon first renewal

Mile Auto[4]

Arizona, California, Florida, Georgia, Illinois, Ohio, Oregon, Pennsylvania, Tennessee, Texas and Wisconsin

Potentially save 30% to 40% by switching

Allstate Milewise[5]

Washington, Oregon, Idaho, Arizona, Texas, Oklahoma, Minnesota, Wisconsin, Illinois, Missouri, Indiana, Ohio, West Virginia, Virginia, Massachusetts, Pennsylvania, Maryland, Delaware, New Jersey, South Carolina and Florida


Metromile Pulse[6]

Washington, California, Oregon, Illinois, Arizona, Virginia, Pennsylvania and New Jersey


Which Companies Offer Usage-Based Insurance?

Car insurance companies have increased the number of user-based insurance (UBI) programs they offer to customers over the years. Here are a few popular ones available on the market.



Nationwide's SmartRide

Up to 40% with a 10% participation discount at enrollment[7]

Liberty Mutual's RightTrack

Up to 30% with a 10% signup discount[8]

Root Insurance

Up to 30%[9]

State Farm's Drive Safe & Save

Up to 30%[10]

USAA's SafePilot

Up to 30% with a 10% signup discount[11]

American Family's KnowYourDrive

Up to 20% with a 10% signup discount[12]

Allstate's Drivewise


Esurance's DriveSense


Farmers' Signal


Geico’s DriveEasy/DriveEasy Pro


What Other Factors Affect Your Car Insurance Rates?

Mileage is only one factor among many that insurance companies use when calculating your rates. Here are some other factors — some personal and others related to your driving — that can affect how much you pay for car insurance. (Note that certain underwriting factors like gender and credit score may be banned in your state.)


Coverage level


Deductible amount

Marital status

Insurance history


Education level

Vehicle type


Vehicle use

Ownership of home

State laws and regulations

Previous claims history

Driving record

Safety features

Credit history


That said, insurance companies may also offer other car insurance discounts based on these other underwriting factors. For example, claims history and driving record are common factors and your insurance company may offer a discount if you haven’t filed a car insurance claim in several years. Similarly, you may get a discount if you buy a new car equipped with anti-theft devices.

How Do I Find My Current Mileage?

The easiest thing you can do is look at the odometer on your instrument panel. You’ll see the total lifetime miles the vehicle has driven. Note what that number is and keep driving, and over time, note the number of miles you drive every week. If it looks like you’re getting close to your policy’s reported annual mileage, either moderate how much you drive or notify your provider.

Many modern vehicles will give drivers the ability to check the number of miles driven per trip, as well. Every vehicle is different, so navigating to this information will vary. Just consult your owner's manual to see if this function is available to you and how to find it.

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Will my insurance be void if I go over mileage?

If you severely underreport your annual mileage, it’s possible that your insurance company will refuse to renew your policy. It's best to inform your insurance company before you've reached your mileage threshold to avoid any potential problems with your coverage.

What is a low-mileage discount?

A low-mileage discount is a means of saving money on your auto policy renewal if your annual mileage falls below a threshold. American Family and USAA are notable providers who offer this benefit.

How do car insurance companies know my mileage?

Drivers who have a telematics device for their vehicle will have their mileage sent to their insurance carrier. Others may have to report their odometer reading at renewal, thereby telling the insurance company how far they drove in a year.

Do I save more on insurance if I drive less?

You will generally save more on your car insurance if you drive less since driving more is connected to a higher likelihood that an accident will occur. 

Does vehicle use affect my insurance rates?

Insurance companies will often ask if you’re using your vehicle for commuter purposes or pleasure purposes, though the language of each insurer may vary. Commuters are typically on the road more, which leads to them paying higher rates, while the latter are more sparing with their drive time, meaning they generally pay less for coverage.


  1. Erie Insurance. “How Many Miles Can a Car Last?” Accessed November 3, 2023.
  2. American Family. “Car Insurance Discounts & Special Offers.” Accessed November 3, 2023.
  3. Nationwide. “SmartMiles.” Accessed November 3, 2023.
  4. Mile Auto. “Driving Less? Then Pay Less.” Accessed November 3, 2023.
  5. Allstate. “Sitting in Your Car Less? Start Saving More.” Accessed November 3, 2023.
  6. Metromile. “Save Up to $947/Year With Pay-Per-Mile Car Insurance.” Accessed November 3, 2023.
  7. Nationwide. “Usage-Based Insurance With Nationwide.” Accessed November 3, 2023.
  8. Liberty Mutual. “RightTrack.” Accessed November 3, 2023.
  9. Root Insurance. “Discounts for What Matters.” Accessed November 3, 2023.
  10. State Farm. “Be Rewarded With Drive Safe & Save Discounts.” Accessed November 3, 2023.
  11. USAA. “Save Up to 30% On Your USAA Auto Insurance Premium for Being a Safe Driver.” Accessed November 3, 2023.
  12. American Family. “Usage-Based Car Insurance With KnowYourDrive App.” Accessed November 3, 2023.

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