Is Car Insurance Based on Mileage or Overall Use?

Understanding how mileage affects car insurance rates is critical in avoiding high premiums, as a high-mileage driver will likely pay more than a low-mileage driver. In addition, there may be options to further reduce your auto insurance premiums if you’re an irregular or low-mileage driver, with programs like pay-per-mile or usage-based insurance.

Learn more about how mileage affects car insurance costs and ways to save.

Key Takeaways Annual mileage can affect car insurance because high-mileage drivers spend more time on the road, making them more likely to get into an accident and file a claim. 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.

Does Mileage Affect Car Insurance Premiums?

Your annual mileage can affect your car insurance premiums because it indicates your likelihood of filing a claim, as you have a higher chance of getting into an accident if you’re on the road for longer.^[1] For example, you may be asked whether your car is used for commuting or pleasure when buying car insurance since a daily commuter will likely have more on-the-road exposure than a weekend cruiser, meaning it will likely necessitate higher premiums.

What Is Considered High Mileage?

In general, car insurance companies consider a vehicle that is driven more than 14,000 miles per year to be high mileage.^[2] If all other underwriting factors are equal, you can generally expect to pay more for auto insurance as a high-mileage driver than as a low-mileage driver.

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

Since mileage is often utilized to determine car insurance rates, 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 renewing your policy, you may need to give them the most current reading of your odometer. Based on the reading, you may pay a higher rate if your actual annual mileage was higher than your estimate. If it turns out that 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.

Similarly, your insurance company may also ask whether the car you’re insuring is used for commuting or pleasure. If you choose commuting, that tells the insurance company that the vehicle will likely be driven regularly and rack up miles.

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

It’s possible to get a low-mileage car insurance discount, but it usually applies when you renew your policy, not when you first buy it. There are three different kinds of discounts insurance companies often offer based on mileage: low-mileage, pay-per-mile and usage-based discounts.

Low-Mileage Discount Programs

Auto insurance companies offer low-mileage discount programs to drivers who maintain fewer miles on their vehicles annually. Car insurance for low-mileage drivers works by setting a maximum mileage threshold, such as 8,000 miles, although thresholds can vary depending on the insurer.^[3]

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 extend the concept of low-mileage discounts by offering a flexible insurance rate that varies with the number of miles driven. Drivers pay a base rate plus a per-mile fee, which is ideal for those who drive infrequently, such as remote workers, remote students and 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 factors related to mileage and driving behavior, such as speed, braking and the time of day when the vehicle is in use. Through a device installed in the car or a smartphone app, insurers gather data to track driving behavior and lower premiums if the data shows low mileage and safe driving behaviors.

Which Companies Offer Pay-Per-Mile Insurance?

Several providers offer pay-per-mile programs to help customers save. Keep in mind that not all pay-per-mile programs are available in every state. Below are some options to consider and how much they can help you save.

Program	Savings
Nationwide SmartMiles[4]	Up to 10% upon first renewal
Mile Auto pay-per-mile insurance[5]	30% to 40%
Allstate Milewise[6]	Savings vary

Which Companies Offer Usage-Based Insurance Discounts?

Several car insurance companies offer user-based insurance programs and discounts to policyholders. However, not every discount program may be available in every state. Depending on your state, qualifying criteria may also vary. Here are a few options available for UBI.

Program	Savings
Nationwide SmartRide[7]	Up to 40% with a 10% signup discount
Liberty Mutual RightTrack[8]	Up to 30% with a 10% signup discount
Root Insurance usage-based discount[9]	Up to 30%
State Farm Drive Safe & Save[10]	Up to 30% with a 10% signup discount
USAA SafePilot[11]	Up to 30% with a 10% signup discount
American Family KnowYourDrive[12]	Up to 20% with a 10% signup discount
Allstate Drivewise[13]	Savings vary
Esurance DriveSense[14]	Savings vary
Farmers Signal[15]	Savings vary

What Factors Affect Your Car Insurance Rates?

Mileage is only one factor among many that insurance companies use when calculating your rates. Some other factors can affect how much you pay for car insurance. Keep in mind that certain underwriting factors, like gender and credit score, may be banned in your state.

Age	Coverage level
Gender	Deductible amount
Marital status	Insurance history
Location	Education level
Vehicle type	Occupation
Vehicle use	Ownership of home
State laws and regulations	Previous claims history
Driving record	Safety features
Credit history	Affiliations

Insurance companies may also offer other car insurance discounts based on these underwriting factors. For example, 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 with anti-theft devices.

How Do I Find My Current Mileage?

The easiest way to find your current mileage is to look at the odometer on your dashboard. You’ll see the total lifetime miles the vehicle has driven. Note what that number is, keep driving and, over time, note the 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 also allow drivers to check the miles driven per trip. Every vehicle is different, so the process of finding this information will vary.

Consult your owner’s manual to see if this function is available and how to find it.

How To Get Car Insurance for Low-Mile or High-Mile Usage

You’ll need to reach out to different car insurance companies to know if you qualify for specific low-mileage programs or to see which insurer offers the best rates for high-mile usage. Get quotes from three to five insurance companies to get a range of options. Keep in mind you’ll need to provide information about your mileage, alongside details about your location, driving record, claims history and other personal details.

This process can become tedious and time-consuming, since you’ll typically need to get quotes from each insurer individually, providing the same information over and over. You can speed up this process by using an insurance marketplace like SmartFinancial. After answering a brief questionnaire, we can connect you with a licensed insurance agent to help you find your ideal auto policy. Click here for a free auto insurance quote today!