How Mileage Can Affect Your Car Insurance Rates

According to figures from the Federal Highway Administration, the typical driver logs just under 13,500 miles per year. Men tend to drive more – about 16,550 miles per year – while women travel about 10,000. Does exceeding or reducing your annual mileage change your insurance rates?
The answer is not as cut and dried as “yes” or “no”. Rather, more specific questions about how much you’ve reduced your mileage or who your insurance carrier is come into play. Upfront, any company giving you a quote will request the current mileage. In addition to this number, other factors may hold just as much weight: Credit score, income and driving history.
Before you make plans to carpool, consider the following points.
How Much of a Discount?
Above, we mentioned that discounts vary across carriers. Based on findings from, that can be as much as:

  • A 14.3% decrease, if you cut your mileage down from 10,000 to 5,000 miles per year with State Farm. Liberty Mutual and Geico offered a 6% discount for the same decrease.
  • If you cut your mileage down to 2,500 per year, Geico cuts rates another 6.7%.

Yet, drastically cutting down on driving isn’t your only option to save. Rather, mileage plays a factor with the following:

  • Low-mileage discounts: Certain carriers may reduce your rates if you stay under a certain number of miles per year.
  • Discounts based on driving habits: A few carriers have per-mileage policies in certain states, while others factor in your location, how much you drive and your habits behind the wheel.
  • Usage-based insurance: A growing option, usage-based insurance tracks your vehicle and bases your premiums on how much and how often you drive. Generally, drivers who stay under 15,000 miles per year see savings.

Driving Habits
Several factors help determine your insurance premiums, with how you use your vehicle being one of them. So, what does mileage signal?

  • A low number: You drive the vehicle infrequently. For instance, if you take out classic car insurance, it’s expected you’ll keep mileage under a certain number annually.
  • A higher per-year number: This is typical of an everyday vehicle but looks suspicious if you’re claiming it for a “hobby” car. The higher the mileage, the greater the chances of damage to your vehicle, as you’re spending more time on the road.
  • High starter mileage: Let’s say you’re seeking an insurance quote and your car already has over 100,000 miles on it. Generally, the higher the starting number, the more repairs your vehicle will need later on – especially if you exceed that 15,000-per year average. As such, your carrier may give you a higher quote.

Insurance Fraud
For these reasons, a driver requesting a quote may stretch the truth a bit: Lower numbers than what the odometer reads or a lower per-year figure. Although you may see reduced rates initially, you’re setting yourself up for allegations of insurance fraud in the future.

For example, let’s say you get into an accident and the repair shop notes the number of miles on your car at that point. While your carrier may not take steps to verify your initial claims, adjusting your mileage shows one of two things: You low-balled the number of miles on the car or you intentionally understated how much you drive each year. When this occurs, your carrier may deny your claim, drop your coverage or take you to court for insurance fraud.

Have you decreased your mileage over the past year? You might be eligible for certain discounts. To review your policy, give us a call at 203.439.2815.