Jeffrey Johnson is a legal writer with a focus on personal injury. He has worked on personal injury and sovereign immunity litigation in addition to experience in family, estate, and criminal law. He earned a J.D. from the University of Baltimore and has worked in legal offices and non-profits in Maryland, Texas, and North Carolina. He has also earned an MFA in screenwriting from Chapman Univer...

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Laura Walker graduated college with a BS in Criminal Justice with a minor in Political Science. She married her husband and began working in the family insurance business in 2005. She became a licensed agent and wrote P&C business focusing on personal lines insurance. Laura serviced existing business and wrote new business. She now uses her insurance background to help educate drivers about...

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Reviewed by Laura Walker
Licensed Agent for 10 Years

UPDATED: Apr 23, 2019

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Drivers who do not drive often or drive great distances are at far less statistical risk to be involved in a car accident than other drivers.

Because of this, these drivers are often eligible for a significant discount on their auto insurance, or may be able to purchase a completely different, “low-mileage” policy which costs far less than a regular insurance policy.

Use our FREE quote tool to compare auto insurance rates today!

What is Low Mileage Auto Insurance?

Low-mileage auto insurance is a policy for drivers who only use thier vehicles in a limited way. Drivers who driver less than 7,500 miles a year or owners with vehicles in storage are often the best candidates.

How much can you save with a low mileage auto insurance policy?

The available of low mileage auto insurance and the cost of such insurance varies from one auto insurance company to the next.

A typical example of how much you could possibly save is by looking at the GMAC car insurance low-mileage discount.

  • If you drive less between 12,500 and 15,000 miles per year, your total insurance bill will be discounted by 13%.
  • If your driving includes between 10,000 and 12,500 miles per year, your discount will be 18%.
  • Between 7,500 and 10,000 miles per year will earn you a 26% discount
  • Between 5,000 and 7,500 miles per year will earn you 34%.
  • If you drive between 2,500 and 5,000 miles per year, your premiums will be discounted by 39%
  • and less than 2,500 miles per year will earn you a huge 54% discount on your total insurance bill.

As you can see its possible to save a lot of money by inquiring about a low mileage policy. This structuring is typical for most companies however some states require more in the way of discounts, or may not allow certain pricing structures.

How do auto insurance companies know how much I drive?

There are several ways that companies confirm the amount you drive per year. One way is by a remote system installed on your car which reports back to the company, such as OnStar for GMAC vehicles.

GMAC requires OnStar in order to offer this discount to its customers; other auto insurance companies give you the option of having a monitor installed, or bringing your car in on certain dates for a confirmation of your odometer reading.

What about auto insurance for vehicles in storage?

If your car is in storage, there are several ways you can take advantage of the low-mileage discount or a policy designed for non-driven vehicles. First, if you never drive your vehicle, you may be eligible to buy a storage-only policy.

This type of policy will only cover your vehicle, however, while it is in storage and not being driven at all. If you plan to drive your car at all on public roads, you should purchase a liability policy and investigate a low-mileage discount.

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What happens if I drive more than my allocated miles?

Some companies offer special “low-mileage” policies which usually cap at 15,000 miles. These policies are available at up to 70% less than regular insurance policies. There are also pay as you go auto insurance policies which only charge you based on miles driven.

The difference between these two types of policies is that if you exceed the mileage on a “low-mileage” policy, you can lose your coverage; a “pay as you go” policy allows you to drive any number of miles and charges you accordingly.

Generally, if you drive more than 15,000 miles, a regular automobile insurance policy is more cost effective for you than a “pay as you go” policy.

What should I consider before buying low mileage auto insurance coverage?

When considering which of these options is the best choice for your situation, you should consider several things.

First, is your low mileage usage a temporary situation, such as when you a traveling? You can often convert your regular insurance policy into a temporary low-mileage policy for a limited time. Is your low-mileage driving a way of life?

If so, explore the options of pay-as-you-go and limited use policies. Do you honestly know how many miles you put on your car per year?

A good way to determine this is to track your mileage for about three months, then multiply by four. Barring a sudden emergency which might require you to drive more often or for a longer distance, this is probably an accurate estimate of your usage.

One final thing to consider: sometimes you can receive better discounts by examining how your insurance policy price is figured. For example, if you do not drive very far to work, yet your policy premiums are high, is it because of some other factor?

If you live close to a large, urban area, but routinely drive short distances to work locally and almost never drive into the “big city,” your insurance company may not realize this and may be charging you premiums based on where you live rather than where you drive.

Talk to your agent to discuss possible ways to lower your premiums based on your actual driving habits.

Use our FREE quote tool to compare auto insurance rates today!

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