Your annual mileage directly affects car insurance rates. More time on the road increases accident risks and claim likelihood, raising your premiums. To save, reduce mileage by carpooling, using public transit or consolidating trips.
How Does Mileage Affect Car Insurance Rates?
Updated: December 1, 2025
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Key Takeaways
Higher mileage raises accident risks and car insurance rates, while lower mileage reduces costs.
Some insurers offer pay-per-mile policies, which are ideal for drivers with low annual mileage.
Providing accurate mileage helps avoid denied claims or overpaying for coverage.
Does Annual Mileage Affect Car Insurance?
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What Is Considered High Mileage?
According to the Federal Highway Administration, driving over 15,000 miles annually is considered high mileage, exceeding the national average of 13,476 miles. Car insurers see this higher mileage as a greater accident risk, leading to higher premiums.
Most companies use 15,000 to 20,000 miles per year as a benchmark for high mileage.
Keeping your mileage below average can help lower your rates. Driving under 7,500 miles annually saves you around $86 per year on standard coverage.
IS HIGH MILEAGE BAD?
Insurers view high mileage negatively because more time on the road increases accident risks. They may charge higher premiums or deny low-mileage discounts to high-mileage drivers. Some insurers offset this by offering usage-based insurance (UBI) programs that focus on driving habits rather than mileage alone.
Car Insurance Mileage Brackets
Car insurance companies classify policy costs into three mileage categories: low, average and high, with each affecting premiums differently.
Low mileage (≤7,500 miles/year)
This category qualifies for the lowest insurance rates, covering drivers who travel 7,500 miles or less per year (roughly 20 miles per day or less). Insurers consider these drivers lower risk due to reduced time on the road.
Average mileage (7,500 – 14,000 miles/year)
Driving between 7,500 and 14,000 miles annually (about 20 to 41 miles daily) results in moderate insurance costs. Most drivers fit into this category.
High mileage (15,000+ miles/year)
Drivers exceeding 15,000 miles per year (over 41 miles per day) fall into the high-mileage category, often facing higher premiums due to increased accident risk and vehicle wear.
Insurance companies often base rates on estimated annual mileage, but some offer usage-based insurance (UBI) programs that track actual driving habits. These programs can lower costs for responsible high-mileage drivers.
How to Calculate Annual Mileage for Insurance
There are methods you can use to calculate or confirm your annual mileage:
- 1Fuel Method (Trip Meter)
- Fill your tank and reset the trip meter to zero.
- Drive as usual (and follow speed limits) until your tank is almost empty.
- Record the miles driven and gallons used.
- Use this formula:
Miles Driven ÷ Gallons Used × Number of Fuel-Ups per Year = Annual Mileage
Repeat a few times for a more accurate average.
- 2Service or Maintenance Records
Your mechanic or dealership logs your mileage during oil changes, tire rotations and vehicle inspections. Compare mileage readings between two service visits, calculate weekly miles, then multiply by 52 to get your annual estimate.
- 3Odometer Logs or Mileage Apps
If you've been tracking your odometer readings, subtract the starting mileage from your current reading. Divide by the number of months elapsed, and multiply that monthly average by 12 to project your annual mileage.
WHAT HAPPENS IF YOU GO OVER YOUR ANNUAL MILEAGE ON INSURANCE?
Exceeding the annual mileage listed on your car insurance policy affects your rates, depending on your insurer and how much you exceed the estimate. Here's what to keep in mind:
- Minor overages: Exceeding your estimated mileage by a small amount usually doesn't lead to immediate penalties, but consistent underreporting causes higher premiums at renewal.
- Significant differences: A large gap between your reported and actual mileage results in an adjusted premium.
- Claim denial or policy cancellation: If an insurer finds you've misrepresented your mileage, it will deny claims or cancel your policy for providing false information.
Annual Mileage Car Insurance Coverage
To lower your rates, consider telematics or pay-per-mile insurance.
Pay per mile or telematics
Pay-per-mile or telematics insurance suits low-mileage drivers by adjusting monthly costs based on miles driven. To save, aim to drive no more than 26 miles per week.
Limited-mileage policy
Limited-mileage policies suit drivers with low annual mileage and work well if you rely on rental cars. These policies provide coverage for a set mileage limit. Criteria vary by insurer.
Classic car insurance
Classic car insurance offers lower premiums since it covers rarely driven vehicles, like a 1950s Chevrolet Cameo or classic Ford models. Consider this option to save on costs for your vintage car.
MILEAGE-BASED POLICY AND TELEMATICS
A mileage-based policy uses telematics to monitor your driving, including hard braking, hard acceleration and other risky behaviors. To secure the best rates, aim to drive 7,500 miles or fewer annually.
Car Insurance Companies Offering Usage-Based Insurance
Metromile is one of the best car insurance providers for low-mileage drivers, offering true pay-per-mile rates to help you save. Below is a table featuring Metromile and other top insurers for affordable coverage based on mileage.
Company | Best For | Pay-Per-Mile Charges |
|---|---|---|
Metromile | Pure pay-per-mile coverage ideal for urban drivers | $29/month + about $0.06 per mile |
Nationwide SmartMiles | Flexible pay-per-mile insurance with full coverage options | Varies — base monthly rate + per-mile fee (rate depends on driver profile) |
Allstate Milewise | Reputable insurer offering a pay-per-mile option | Daily base rate + per-mile fee (varies by driver and location) |
Miles Auto | Simple pay-per-mile without tracking driving behavior | Low monthly base rate + fixed per-mile fee (varies by state and driver) |
HOW DO INSURERS VERIFY YOUR MILEAGE?
Insurers may confirm your mileage using:
- Odometer readings: Submitted during sign-up, renewal or claims.
- Service or repair records: Routine maintenance often includes logged mileage.
- Telematics devices: Track mileage automatically through a plug-in or mobile app.
- Self-reported estimates: Used by some insurers but may be audited for accuracy.
Car Insurance Cost Comparison Tool
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Does Mileage Impact Car Insurance: Bottom Line
Your annual mileage influences the price of your car insurance; the more you drive, the higher your risk and premium. Whether you’re a low-mileage commuter or a high-mileage road warrior, understanding how insurers view and verify mileage can help you find the most accurate rate
Choose usage-based or pay-per-mile policies if you drive less, and report your mileage honestly to avoid surprises.
Does Higher Mileage Increase Insurance: FAQ
MoneyGeek answered common questions about how mileage impacts premiums and provided tips to help you save.
Why are cars with longer mileage more expensive to insure?
Insurers charge higher rates for cars with higher annual mileage because of the greater risk of getting into accidents.
Can you save on insurance by having lower mileage?
You can save on premiums by maintaining low mileage, under 7,500 miles per year. However, mileage isn't the only factor insurance companies consider when determining rates.
Should I use usage-based policies?
If you drive infrequently, consider usage-based policies like pay-per-mile insurance to minimize your premiums.
What does annual mileage mean for car insurance?
Annual mileage refers to the total number of miles you drive in a year. Insurers use this number to help determine how much risk you pose.
How do insurers verify mileage?
Insurers confirm your mileage using odometer readings, service records or telematics devices.
Car Insurance Based on Mileage: Our Review Methodology
Annual mileage drives premium costs because higher road exposure increases accident probability. Most drivers overlook potential savings from mileage reduction despite annual savings reaching $200 to $400. This research quantifies mileage's premium impact and identifies when pay-per-mile policies deliver better value than traditional coverage.
Data collection covered 83,056 quotes from 46 insurers across 473 ZIP codes, comparing traditional and pay-per-mile models. State insurance departments and Quadrant Information Services provided accuracy across mileage brackets and driver profiles.
Mileage offers controllable premium influence unlike age or location. Carpooling, public transit and remote work reduce annual totals, dropping drivers from high to low brackets. The 12,000-mile baseline represents national averages, establishing premium difference benchmarks for higher and lower travel patterns. Testing multiple levels identified break-even points where pay-per-mile coverage becomes economical.
Standard profile testing ensures fair comparison: 40-year-old male, Toyota Camry LE, clean record, 12,000 annual miles. Mileage adjustments reveal rate changes across three brackets: low mileage (7,500 miles or less) qualifying for discounts, average mileage (7,500 to 14,000 miles) receiving standard pricing, high mileage (15,000 miles plus) triggering increases. Results show whether 2,500 or 5,000-mile reductions produce meaningful savings and when pay-per-mile policies become cost-effective.
Two coverage levels represent common choices:
National Standard (100/300/100): $100,000 bodily injury per person, $300,000 per accident, $100,000 property damage
State Minimum Plus (50/100/50): $50,000 per person, $100,000 per accident, $50,000 property damage
Both include comprehensive and collision coverage with $1,000 deductibles (out-of-pocket amounts before insurance pays claims).
Coverage level testing reveals differential impacts. Lower coverage produces smaller mileage-based swings. Comprehensive policies demonstrate dramatic bracket differences. All data reflects 2025 rates and current pay-per-mile programs.
Car Insurance Based on Mileage: Related Articles
About Mark Fitzpatrick
Mark Fitzpatrick, a Licensed Property and Casualty Insurance Producer, is MoneyGeek's resident Personal Finance Expert. With over five years of experience analyzing the insurance market, he conducts original research and creates tailored content for all types of buyers. His insights have been featured in publications like CNBC, NBC News and Mashable.
Fitzpatrick holds a master’s degree in economics and international relations from Johns Hopkins University and a bachelor’s degree from Boston College. He's also a five-time Jeopardy champion!
He writes about economics and insurance, breaking down complex topics so people know what they're buying.
sources
- Federal Highway Administration. "Average Annual Miles per Driver by Age Group." Accessed July 16, 2025.