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: October 7, 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
Estimating your yearly mileage helps you avoid overpaying for car insurance or facing denied claims for underreporting. Here are three reliable methods you can use to calculate or confirm your annual mileage:
- 1Fuel Method (Trip Meter)
This approach gives you a ballpark estimate:
- 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.
Alternatively, use smartphone apps or in-car telematics devices that track your 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
Car insurance often costs less if you drive fewer miles. To lower your rates, consider telematics or pay-per-mile insurance, where premiums depend on miles driven. Limited-mileage policies work for drivers who travel less than average.
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.
Compare Insurance Rates
Ensure you are getting the best rate for your insurance based on your mileage. Compare quotes from the top insurance companies.
Compare Costs
Depending on where you live, you can find affordable car insurance by comparing costs across insurers if you are within the low-mileage car insurance bracket.
Know Your Mileage
Underestimating your mileage causes insurers to reject claims after accidents, and overestimating leads to higher premiums than necessary.
Easy Quotes
It is easy to get multiple quotes and find the best rate.
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. The more you drive, the more likely you are to get into an accident, which is why higher mileage often leads to higher premiums.
How do insurers verify mileage?
Insurers confirm your mileage using odometer readings, service records or telematics devices. Some also rely on self-reported estimates but audit for discrepancies during renewals or claims. Accurate reporting helps avoid pricing issues or denied claims.
Car Insurance Based on Mileage: Our Review Methodology
Our Research Approach
Your annual mileage dramatically affects what you pay for car insurance. Drivers covering 12,000 miles yearly (the national average) pay standard rates, while those driving less can save hundreds with pay-per-mile policies. We designed this research to show exactly how mileage impacts your premiums and whether alternative coverage models make financial sense.
We collected and analyzed 83,056 auto insurance quotes from 46 insurers across 473 ZIP codes to compare traditional policies against pay-per-mile options. Our data comes from state insurance departments and Quadrant Information Services, ensuring accuracy across different mileage brackets and driver profiles.
Why Mileage Matters in Our Analysis
We focused on mileage because it's one of the few insurance factors you can control. Unlike your age or location, you can reduce annual mileage through carpooling, public transit or remote work, potentially saving $200 to $400 annually by dropping from high to low mileage brackets.
Our baseline profile drives 12,000 miles per year because it represents the national average, letting us show premium differences for drivers who travel more or less. We tested multiple mileage levels to identify the break-even point where pay-per-mile policies become cheaper than traditional coverage.
Testing Across Driver Profiles
We used a standard profile to ensure fair comparisons:
- 40-year-old male
- Toyota Camry LE
- No driving infractions
- 12,000 miles driven per year
Then we adjusted mileage up and down to show how rates change across three key brackets:
- Low mileage: ≤7,500 miles (often qualifies for discounts)
- Average mileage: 7,500-14,000 miles (standard pricing)
- High mileage: 15,000+ miles (premium increases)
This approach reveals whether reducing your mileage by 2,500 or 5,000 miles produces meaningful savings and at what point pay-per-mile policies become cost-effective.
Coverage Levels We Tested
We analyzed two coverage levels that most drivers choose:
National Standard (100/300/100):
- $100,000 bodily injury liability per person
- $300,000 bodily injury liability per accident
- $100,000 property damage liability
State Minimum Plus (50/100/50):
- $50,000 bodily injury liability per person
- $100,000 bodily injury liability per accident
- $50,000 property damage liability
Both scenarios include comprehensive and collision coverage with $1,000 deductibles. The deductible is what you pay before insurance covers a claim—if damage totals $2,000, you pay $1,000 and your insurer covers the remaining $1,000.
We tested both coverage levels because mileage affects them differently. Lower coverage often sees smaller mileage-based price swings, while comprehensive policies show more dramatic differences between mileage brackets.
All data was updated in 2025 to reflect current rates and the latest pay-per-mile program offerings. Learn more about MoneyGeek's methodology.
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.
