Car insurance costs jumped 18.6% from July 2023 to July 20241. This surge has drivers hunting for cheaper options. Low-mileage car insurance could be your money-saving solution.
Insurers reward drivers who travel less annually. You can save 5% to 10% if you drive 7,500 miles or less yearly12. By mixing discounts, you might cut your total costs by 40% or more1.
Insurance firms compete for your business with various discount programs. Safe driver discounts range from 10% to 25%. Bundling policies could save you up to 20%12.
Tech-savvy drivers can benefit from telematics programs. These usage-based options offer 5% to 30% discounts based on driving habits1. Drive safely and watch your savings grow.
Key Takeaways
- Low-mileage discounts can save you 5% to 10% on car insurance
- Combining discounts could result in up to 40% total savings
- Safe driver discounts range from 10% to 25%
- Bundling policies can lead to savings up to 20%
- Telematics programs offer discounts between 5% and 30%
- Shop around to maximize your savings potential
Understanding Low-Mileage Car Insurance
Car insurance costs vary based on your driving habits. Less driving could mean lower insurance premiums. Let’s explore low-mileage car insurance and its potential savings.
What is low-mileage car insurance?
Low-mileage car insurance targets drivers who use their vehicles less frequently. It’s for those driving below the average 13,476 miles per year3.
Insurance companies offer these plans because less driving means lower accident risk. This reduced risk often translates to lower insurance rates.
How mileage affects your insurance premiums
Your annual mileage directly impacts your insurance costs. A policy for a car driven 20,000+ miles yearly can be 36% pricier than one driven 5,000 miles or less3.
This difference highlights the potential savings through low-mileage plans. Choosing the right plan could significantly reduce your insurance expenses.
| Annual Mileage | Average Rate Increase |
|---|---|
| Under 7,500 | Base rate |
| 7,500 – 10,000 | 6% |
| 10,000 – 12,500 | 8% |
| 12,500 – 15,000 | 12% |
| 15,000 – 20,000 | 25% |
Qualifying for low-mileage discounts
To qualify for low-mileage discounts, you typically need to drive about 8,000 miles or less yearly4. Many insurers offer discounts for those driving under 7,500 or 8,000 miles annually.
Some companies use usage-based programs to track your mileage and driving habits. These programs can lead to even greater savings for careful drivers.
Metromile claims drivers covering 2,500 miles yearly can save about $947 with their pay-per-mile program4. Allstate Milewise® states low-mileage drivers can save up to 50% compared to traditional policies4.
Understanding low-mileage car insurance options can lead to significant savings. You can reduce costs while maintaining the protection you need.
Strategies to Reduce Your Car Insurance Costs
Smart strategies can help you save on car insurance. You can lower your rates without losing coverage. Let’s look at ways to keep more money in your pocket.
Bundling Policies for Maximum Savings
Multi-policy discounts offer easy savings on car insurance. Bundling auto and home insurance with one provider can cut premiums by 5% to 25%5. Insuring multiple vehicles together might save you 8% to 25%5.
These discounts add up quickly. They can make a big difference in your overall insurance costs.
Exploring Usage-Based Insurance Programs
Telematics car insurance is popular among cost-conscious drivers. These programs track driving habits and offer discounts for safe behavior. Careful drivers who don’t drive much could save up to 30%5.
Taking Advantage of Safe Driver Discounts
Insurance companies reward good drivers with big discounts. A clean driving record could save you 10% to 40%5. Completing a defensive driving course might lead to a 10% discount for three years5.
Young drivers with good grades can save too. Good student discounts of 8% to 25% are available for B averages or better5.
Improving Your Credit Score for Better Rates
Your credit score greatly affects your car insurance rates. Drivers with poor credit pay 76% more than those with good credit5. The average full coverage rate for excellent credit is $1,749 annually.
Those with poor credit might pay up to $4,0636. Improving your credit score could lead to big savings on car insurance.
FAQ
What is low-mileage car insurance?
Low-mileage car insurance rewards drivers who use their cars less often. It’s perfect for those driving under 15,000 miles yearly. This option offers discounts because less driving time means lower accident risk.
How much can I save with low-mileage car insurance?
Low-mileage drivers can enjoy discounts of 5% to 10% on their car insurance. By combining this with other savings tricks, you could slash up to 40% off your costs.
How do insurers determine if I qualify for low-mileage discounts?
Insurers may ask for regular odometer readings to check your mileage. Some use telematics devices to track your annual miles driven. Pay-per-mile insurance is another option, offering a base rate plus a per-mile charge.
What are usage-based insurance programs, and how can they help me save?
Usage-based insurance programs track your driving habits using apps or plug-in devices. Safe driving could earn you discounts between 5% and 30% on your premiums.
How can bundling insurance policies help me save money?
Bundling multiple policies with one insurer can save you up to 20%. This applies to auto and home insurance combinations. It’s a simple way to cut costs and simplify your coverage.
How does my credit score impact my car insurance rates?
Your credit score influences your car insurance premiums. Higher scores often lead to lower rates. Insurers view good credit as a sign of financial responsibility.
Source Links
- Car insurance discounts: How to maximize your auto policy savings – https://www.foxbusiness.com/fox-money/auto-insurance/car-insurance-discounts
- Overlooked Auto Insurance Discounts • McLeod Insurance – https://mcleodinsagency.com/blog/overlooked-auto-insurance-discounts/
- How does mileage affect car insurance rates? | Average miles driven per year – https://www.insure.com/car-insurance/mileage-and-car-insurance-rates/
- Low-Mileage Car Insurance – https://www.marketwatch.com/guides/insurance-services/low-mileage-car-insurance/
- 10 Ways To Lower Your Car Insurance Costs – https://www.forbes.com/advisor/car-insurance/tips-lower-car-insurance-costs/
- How To Save On Car Insurance: 7 Ways To Lower Your Rate | Bankrate – https://www.bankrate.com/insurance/car/savings/
