Best Cheap Low-Mileage Car Insurance Companies

Drivers can save money by purchasing low-mileage car insurance, but there may be better ways to reduce your car insurance costs without adjusting your mileage.

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Typically, people who drive less than 7,500 miles per year qualify for low-mileage discounts on their car insurance. Drivers on the road for less than 7,500 miles per year can save an average of $86 per year on car insurance compared to drivers who travel 15,000 miles or more. State Farm offers the biggest savings to low-mileage drivers at $115 per year — however, this doesn’t necessarily mean that they have the cheapest overall rates.

Some companies also offer pay-per-mile car insurance, which tracks your mileage and charges you a specific fee-per-mile. However, not every insurance company has this type of plan and may not be the best policy for people who have a regular commute.

Key Takeaways

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Low-mileage discounts tend to be relatively minor, so they aren't the best way to save on premiums.

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State Farm offers the best low-mileage discount, but GEICO remains the cheapest overall.

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Shopping around and comparing quotes is a more effective way to save money than securing this discount.

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What Is Low-Mileage Car Insurance and Who Qualifies?

For those looking for the cheapest car insurance for low-mileage drivers, there are two types of policies to consider:

  • Traditional Low-Mileage Discount: Offered by most insurance companies, this discount offers reduced rates for driving fewer miles. Typically, people who drive less than 7,500 miles per year or 10 miles or less per workday are eligible for this discount.
  • Pay-Per-Mile Insurance: Some insurance companies offer plans that track your mileage and determine your rate based on the exact number of miles driven in a given period. This type of policy isn’t available in every state and comes with a loss of privacy, which means that it might work for some people, but it may not be the best option for everyone.

Traditional Low-Mileage Car Insurance Discounts

What is considered low mileage per year? Generally speaking, most companies that use annual mileage to determine your rates tend to break mileage down into three categories:

  • Low mileage: Less than 7,500 miles per year or 10 miles per day
  • Average mileage: 7,500–15,000 miles per year or 20 miles per day
  • High mileage: 15,000+ miles per year or 40 miles per day

Compared to average-mileage drivers, low-mileage drivers save $56 per year on car insurance, on average.

Pay-Per-Mile Car Insurance

Pay-per-mile car insurance is a system that calculates your exact mileage and determines your rates based on how often you drive. This type of program is relatively new, but these plans are becoming more common thanks to phone apps and tracking devices. Some newer companies exclusively use this system to determine their rates.

According to our research, drivers need to travel less than 26 miles per week for a pay-per-mile plan to be cheaper than a traditional policy. Because several factors determine your rates, getting a reduced rate for driving fewer miles may not be the most effective way to lower your car insurance rates significantly.

Best Cheap Companies for Low-Mileage Car Insurance

GEICO offers the best car insurance for low-mileage drivers at an average rate of $982 per year. The company with the largest discount for low-mileage insurance is State Farm. They offer a discount of $115, bringing their average low-mileage premium to $1,092 per year — still $110 more than GEICO’s rate.

Just because a company offers a discount for a low-mileage plan doesn’t mean they have the lowest rate. Comparing quotes and choosing the most affordable plan can save you more money than choosing the company with the best discount for low-mileage car insurance.

USAA technically has the lowest rate for low-mileage insurance. However, because their coverage is only available to military members and their families, they aren’t included in our calculations.

Cheapest Car Insurance Companies for Low-Mileage Drivers

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GEICO

GEICO is the cheapest option for low-mileage coverage. MoneyGeek ranks them among the best car insurance options in almost every state because of their low rates and easy-to-use online tools.

Best Cheap Companies for Pay-Per-Mile Car Insurance

Most car insurance policies factor in mileage when determining rates, but some policies offer a pay-per-mile rate. According to our research, Nationwide offers the best pay-per-mile insurance policy.

Many insurance companies also offer discounts for using apps that track your driving behavior. These programs reward people for driving well, even if they aren’t on the road any less. However, keep in mind that behavior-based programs require you to allow your insurance company to track you on the road. As such, drivers who have privacy concerns may not be interested in this type of discount.

Who Should Get Low-Mileage Car Insurance?

If you drive less than 7,500 miles per year, ask your insurance company if they offer a low-mileage discount. Be aware that maximum mileage requirements are different for each company, so you may qualify for a discount with some insurance companies but not others.

Pay-per-mile insurance is another option to help keep your rates low. However, MoneyGeek’s findings indicate that you’ll have to drive less than 26 miles per week to see significant savings.

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Online quotes are estimates, so your specific rates may be higher or lower than a sample quote reflects. Talk to an insurance agent or other representative to ensure all eligible discounts are applied to your premium, including discounts for low mileage.

While taking advantage of a low-mileage discount can save you some money, there are more effective ways to reduce your car insurance premiums and find the cheapest coverage options. Comparing quotes to make sure you have the lowest possible rate, cleaning up your driving record, improving your credit score and bundling your insurance policies can all help you save. If you don’t have any loans on your vehicle and you can afford to replace it out of pocket, carrying liability-only coverage can help you reduce your overall insurance costs.

How to Get Low-Mileage Car Insurance

Low-mileage discounts can help you save money, but they aren’t automatically given to you by your insurance company. To get low-mileage car insurance, you need to understand whether or not you qualify and actively seek a discount by following these steps.

1

Calculate Your Current Annual Mileage

Set your car's odometer to zero and wait one week. After one week, take note of the number of miles you've driven. Multiply that figure by 52 to get an idea of your annual mileage.

2

Reduce Your Mileage, if Possible

If you drive more than 7,500 miles annually, decide if it is possible to reduce your overall mileage by carpooling to work, walking to the store, or finding other ways to reduce your mileage.

3

Reach Out to Your Insurance Company

Check with your insurance company and get quotes from others to see if you qualify for a low-mileage discount.

4

See if You’d Benefit From Pay-Per-Mile Insurance

If you drive less than 26 miles per week, you could benefit from a pay-per-mile insurance program.

Methodology

MoneyGeek uses a sample driver profile to determine average insurance rates. Our standard driver is a 40-year-old male with a clean driving record, full coverage and liability levels of 100/300/100 with a $1,000 deductible.

About the Author


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Rachael Brennan is a professional finance writer and licensed insurance agent. She has worked in the insurance industry for more than a decade, earning her P&C license in all 50 states and her life, health and AD&D license in New York and the surrounding states. Rachael has worked for well-known companies such as 21st Century Insurance and BlueCross BlueShield and was the Unitarian Universalist Association (UUA) insurance plans coordinator for three years. She specializes in property, casualty, health, life, accidental death and disability insurance.

Rachael earned her bachelor of science degree in communications from Texas A&M University-Commerce. Rachael combines her writing background with her insurance and personal finance experience to share practical knowledge and help people make informed financial decisions.