How does mileage affect car insurance rates in 2024?

How many miles do you log in your car each week? The answer plays a big role in how much you pay for car insurance.

Car insurance companies may look at the number of miles you drive when setting your rates. If you don’t drive frequently, your rates might be lower.

“Generally, people who drive less often have a decreased chance of being in an accident,” says Kelly Hernandez, associate vice president of personal lines telematics at Nationwide Insurance.

On the other hand, those who drive many miles may pay more. The more you’re on the road, the higher the chance you’ll get into an accident. That means car insurance companies consider you a higher risk, and so your rates will reflect this.

Insurance companies reward those who pose less risk, so drivers who drive less receive low-mileage car insurance discounts.

What is the average annual mileage for car insurance? 

Americans drive an average of more than 13,000 miles per year, according to data on the  Department of Transportation’s Federal Highway Administration (FHWA) website, which was last updated in May 2022.

Annual mileage totals affect insurance premiums because the number of miles you drive predicts the risk of you filing a claim.

For example, a Verisk analysis found that vehicles driven less than 3,000 miles annually are involved in 40%  fewer claims. By contrast, cars driven 20,000 miles or more annually record 31% more claims. 

The amount drivers pay for their insurance is determined by the miles they put on their cars. The greater their mileage, the more expensive their insurance policy will be. On the other hand, the lower mileage means a lower monthly payment.

Average miles driven per year in the U.S.

U.S. drivers travel 13,476 miles per year, on average, according to the most recent FHWA data.

Average annual miles driven per year by age group

How much your rates increase by average annual mileage

The table below shows the common mileage benchmarks alongside the percentage increase in insurance rates as mileage goes up.  

Average insurance rates increase based on annual mileage

Graph

Table

Miles	Increase in rates
5,000	Receives best rates
7,500	Up average of 10% from 5,000
10,000	Up average of 7% from 7,500
12,000	Up average of 4% from 10,000
20,000	Up average of 25% from 12,000

Mileage above 20,000 stayed the same, with a 0% increase. In this example, annual mileage over 20,000 was not rated any worse than if you were driving just 20,000 miles a year.

Insure.com has determined that a car insurance policy with 20,000 miles or more driven annually is 36% more expensive than if you drive 5,000 miles or fewer a year. In our example, the driver with fewer than 5,000 miles would save around $750 compared to the driver on the road for 20,000 miles or more.

How much do you pay for insurance based on your annual mileage?

As you spend more time on the road, the odds that you will be involved in an accident increase. For that reason, insurers will likely charge higher premiums to drivers who log more miles. 

Here is a breakdown of how much a driver can expect to spend on car insurance based on the number of miles driven:

Average car insurance cost by mileage

Graph

Table

Mileage	Average annual cost
Under 7,500	$2,015
7,501 to 9,999	$2,099
10,000 to 11,999	$2,138
12,000 to 14,999	$2,237

Cheapest car insurance companies for low annual mileage 

Each car insurance company has its own criteria for setting rates. That means drivers who have low annual mileage totals are more likely to save with some insurers than with others. 

Here is a breakdown of the cheapest car insurance companies for those with low annual mileage totals under 7,500 and those who drive more.

Annual mileage under 7,500

Annual mileage 7,501 to 9,999

Annual mileage 10,000 to 11,999

Annual mileage 12,000 to 14,999

How do insurers know your average annual mileage?

Have you ever wondered how car insurance companies know how many miles you drive? The answer is simple: They ask you to estimate the total when you apply for insurance.

You might be tempted to cheat and tell a little white lie, suggesting you drive very little to get a lower insurance rate. However, it is not wise to lie about the number simply to get a discount. For example, some insurance companies will request mileage checks during the year if you submit a lower-than-average number.

If you are driving less because you’re working from home, recently retired, or some other reason, make sure you accurately guess your “new” annual mileage. Don’t just keep the amount you have entered in the past or a default amount the company may have on its form.

There are other ways for car insurance companies to determine your annual mileage. Rather than have you tell them, they can monitor your driving performance and mileage if you sign up for one of their pay-as-you-drive or usage-based insurance plans. We will explain more about those options and how to earn extra discounts below.

What are commuting miles and how do they affect car insurance rates?

Insurance companies are interested in your daily commute, including how many miles you drive to and from work and how often you make the trip each week.

This can help the car insurance company better gauge whether the total estimated number of miles you drive each year matches reality.

For example, the base insurance rates tend to be better if you live in a suburb of a larger metro area. But if you commute 40 miles each way for work into the downtown area of that major city, your rates may rise. That is because you are commuting into the busy, traffic-packed metro area for work, which puts you at more risk of an accident than driving five miles to work in your local area with less traffic.

In general, if you drive more than 20 miles each way to work, your car insurance rates will be higher.

Today, fewer people are commuting to work. “As a result of the pandemic, we’re seeing consumer driving behavior changing permanently in many instances,” Hernandez says.

As a result, she says there has been a “notable increase of new customers” who can benefit from mileage-based insurance programs.

What is considered low mileage for car insurance?

Determining what qualifies as “low mileage” depends on state laws as well as your car insurance company’s guidelines. For the most part, insurance companies consider under 12,000 miles a year to be lower than average.

However, some insurers require that you drive less than 10,000 miles to qualify for low mileage, and they wait to hand out bigger discounts until you are under that number of annual miles.

“The typical candidate who would benefit from a mileage-based insurance program drives less than 10,000 miles a year,” Hernandez says.

Some insurers might offer even bigger low-mileage discounts if you drive less than 7,000 or 5,000 miles annually.

Insurance companies tend to have car insurance mileage brackets, and your rates can be higher or lower based on where your annual mileage falls.

Mileage brackets for car insurance are the internal tier system car insurance companies use to determine if motorists drive an average amount or more or less. They are based on each car insurance company’s unique algorithms and state laws.

How to get low-mileage car insurance 

To get the better rates associated with low-mileage car insurance, you must determine if you qualify by following the steps below:

• Calculate your current average mileage. Set your car’s odometer to zero. Then, take note of the number of miles your car travels over the next week. To get the current annual average mileage, multiply the obtained odometer value by 52.
• After calculating the current average mileage, contact your insurer and ask for quotes to see if you qualify for low-mileage auto insurance. 
• If you drive less than 26 miles per week, you may have another option: “pay per mile” insurance. With this type of coverage, you pay for each mile you drive.  

How much of a low mileage discount can I get?

Low-mileage discounts vary. Some auto insurance providers offer as much as 20% for a low-mileage discount. However, our data studies show many drivers get 5% or less on average nationally.

California is one state where drivers get better mileage discounts than others due to the state’s unique laws regarding what and how insurance companies can use rating factors. California drivers get an average of an 11% low-mileage discount.

Under state law, mileage is one of the three primary factors insurance companies can use, the other two being a driver’s safety record and years of driving experience. So, the discount is larger if you drive fewer miles in California. On the other hand, if you drive a lot of miles, your rates will be higher.

Is there low-mileage car insurance?

While mileage is normally just one part of the rating factors car insurers look at when setting rates, there are programs that some insurance companies offer where mileage plays a much bigger role in setting your rate. These programs are often called PAYD — or “pay-as-you-drive” — insurance.

One mileage-based insurance company is Metromile. It has a two-part pricing system where you have a low monthly base rate and then a second per-mile rate.

The mileage charges are capped at 250 miles per day (150 in New Jersey).

Metromile is available in the following states:

• Arizona
• California
• Illinois
• New Jersey
• Oregon
• Pennsylvania
• Virginia
• Washington

Another per-mile insurer is Mile Auto. It says drivers can save 30% to 40% off their car insurance rates.

Mile Auto doesn’t have you install anything to monitor or track your mileage. Instead, you only snap a photo of your odometer once a month and send it to them. The miles you’ve driven plus your base rate total your monthly premium.

Mile Auto is available in the following states:

• Arizona
• California
• Georgia
• Illinois
• Ohio
• Oregon
• Pennsylvania
• Tennessee
• Texas

Other insurers to note:

Nationwide has its SmartMiles pay-per-mile program. Like Metromile, it has a base rate and then cost per mile. The program is available in 45 states, Hernandez says. “If you feel that you drive less than an average customer, SmartMiles could be a good option to consider,” she says.

Allstate has Milewise, which has a daily rate plus a per-mile rate to give you your daily cost. This program is available in more than a dozen states.

State Farm’s Drive Safe and Save with OnStar also tracks your mileage and offers discounts based on annual mileage.

If you do not drive a lot over a year, check out these programs to see if they are available in your state and would cover your specific needs. If so, give one of them a shot to save.

If, for some reason, you don’t like the program, you can go back to a traditional policy.

Types of usage-based insurance programs

Many insurance companies are offering usage-based insurance (UBI) for drivers. These programs will consider your mileage but are more concerned with monitoring your driving behavior to see if you’ll earn a discount.

Here is an overview of a few of the usage-based offerings:

Progressive Snapshot. Snapshot was one of the first UBI rating programs. Your driving is tracked through a mobile app or a tracking device you plug into your car’s onboard diagnostic port.

The tracking reveals your driving habits, such as how much you drive, when you drive, and how you drive. Braking too hard or speeding too much can lower your driver score, which could increase your rates in some states. If you show good driving behavior, you’ll earn a discount.

Allstate Drivewise. A little different than Milewise, this program has you plug in a device to determine if you can get a higher safe-driver discount. Allstate says the discount can be up to 40%.

Farmers Signal. By signing up and downloading the Farmers Signal app, you can earn discounts at your next renewal if you display good driving habits — although it’s also possible that risky behaviors could drive your costs higher.

You can also win rewards in a drawing each month if you keep your focused driving score at 80% or better.

How to save on car insurance

Whether you drive a little or a lot of miles each year, the key to finding the best-priced policy for your needs is to shop around.

If you drive fewer miles annually, alert your car insurance company and see if you can lower your premiums.

Also, look around at renewal time to see if other insurers offer better discounts and can beat your insurer’s rate quote.

Even if you drive many miles, you should still shop around for a policy. That is the best way to get cheaper car insurance rates and find an insurer that best suits your needs.

If you don’t mind your car insurance company monitoring your driving, look into usage-based programs and give one a test drive. Most of these programs let you back out if your driving style doesn’t get you discounts.

How can I accurately track my mileage?

For many years, the best way to track your mileage was simply to use a pen and paper to write down your mileage at the beginning and end of trips. 

While that method is still available to everyone, there are now phone apps — such as Zoho Expense, Shoeboxed and Everlance — that can make tracking your mileage even easier. 

Of course, when calculating your mileage for car insurance purposes, you don’t necessarily need to log your mileage on every trip. For example, you could:

• Record the beginning mileage on your odometer on the first day of the week. 
• Record the ending mileage on your odometer on the last day of the week. 
• Take the miles you drove that week and multiply by 52 to get a yearly total. 

You would likely get an even more accurate picture of your mileage by looking at your odometer on the first day of January and the last day of June and doubling the total. 

Top takeaways

• If you drive fewer miles per year, you pose less risk to your insurer and so will pay less.
• Ask for a low-mileage discount and adjust your annual mileage with your insurer if you recently started driving less.
• Consider a usage-based insurance program, which many companies are offering, to track your mileage and receive reports on your driving behavior.

Car insurance based on mileage can make sense. The more you’re behind the wheel, the greater the odds of being in an auto accident. However, it’s only one of the common rating factors car insurance companies look at. So, even if you drive a lot, there are many other ways to lower your car insurance rates.

Resources & Methodology

Methodology

Insure.com based rates on a 40-year-old male who drove 15,000 miles annually and had full coverage – 100/300/50 liability with a $500 deductible for collision and comprehensive. We analyzed 2,677,890 quotes from 4,686 ZIP codes in 1,252 cities.