Updated: June 30, 2025
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Remote workers, retirees, college students and urban dwellers with alternative transportation often see the best savings from low-mileage car insurance programs.
GEICO offers the most affordable car insurance coverage at $1,223 per year, while State Farm provides the largest low-mileage car insurance discount at $115 annually.
Some insurers offer pay-per-mile insurance, but it may not be ideal for drivers with a regular commute. Nationwide is the best company for pay-per-mile plans
Drivers who don't drive much might qualify for low-mileage car insurance. This is a type of policy or discount that rewards drivers who are on the road less often.
Generally, driving less often reduces the likelihood of an accident, which reduces claims frequency. Insurance companies recognize this and offer premium reductions to drivers with lower-than-average annual mileage. How much you can save may vary depending on the company, but it averages $86 per year.
The definition of "low mileage" varies among insurance companies. Most insurers consider drivers with annual mileage under 7,500 miles to qualify for low-mileage car insurance. But some companies set thresholds as low as 5,000 miles or as high as 10,000 miles, depending on their risk models and competitive positioning.
The insurance industry uses standardized mileage classifications based on extensive actuarial research and federal transportation data. Below are the standard classifications.
For drivers looking for the most affordable coverage for infrequent driving, there are three primary types of low-mileage policies: traditional low-mileage discounts, pay-per-mile insurance and usage-based insurance. Understanding how each option works and conducting a break-even analysis helps determine the best financial value for your situation.
Most insurance companies offer the traditional low-mileage discount for drivers who log fewer than 7,500 miles annually. You'll get a percentage reduction from your standard premium based on your reported mileage.
The discount applies when you get your quote and stays active throughout your policy term. Some insurers request periodic odometer readings to verify your low-mileage status, but the process stays straightforward with predictable savings.
Pay-per-mile car insurance calculates your rates based on how much you drive. You pay a base monthly rate plus a per-mile fee for each mile driven.
Most pay-per-mile programs cap daily charges at 150 to 250 miles to protect against high bills during road trips. The system tracks your mileage through a device plugged into your car's diagnostic port or a smartphone app using GPS. This option works best for drivers who consistently travel very few miles and want their insurance costs to reflect actual usage.
Usage-based or telematics insurance uses technology to monitor your driving habits in real time. Instead of basing your rates solely on traditional factors like age and location, UBI programs track how much you drive, when you drive and how safely you operate your vehicle. These programs monitor several key metrics:
UBI programs use two primary methods to collect driving data. App-based tracking uses your smartphone's built-in sensors and GPS to monitor driving behavior automatically. You need to download an app and grant certain permissions. Plug-in devices involve a physical device you plug into a vehicle's OBD-II port and connect to the car's computer system. The insurer provides the physical tracking device.
Program Type | Cost Structure | Common Threshold | Break-Even Analysis | Best For |
|---|---|---|---|---|
Traditional Low-Mileage Discounts | Standard premium with discount applied | 7,500 miles or less annually |
| Drivers who can verify low mileage and prefer simple discount structure |
Pay-Per-Mile Insurance | Base monthly rate + per-mile fee | Under 10,000 miles annually |
| Drivers with reduced annual mileage who want precise usage-based pricing |
Usage-Based Insurance (UBI) | Standard premium with behavior-based discounts | Variable thresholds based on overall driving behavior |
| Safe drivers comfortable with technology who want maximum savings potential |
Choose a program based on your verified annual mileage and comfort with technology to maximize your potential savings:
The availability of low-mileage car insurance depends on the company and the specific programs they offer. Among major insurers, GEICO, State Farm and Nationwide stand out as the best options for low-mileage drivers, each offering different approaches to help you save money.
Company | Program Type | Mileage Tracking | Technology Required | Daily Cap | Best For |
|---|---|---|---|---|---|
GEICO | Traditional discount | Self-reported with periodic verification or telematics device | Optional (DriveEasy | N/A | Drivers wanting simple discounts with competitive base rates |
State Farm | Traditional discount + UBI option | Self-reported or telematics device | Optional (Drive Safe & Save) | N/A | Drivers who want flexibility between traditional and technology-based programs |
Nationwide | Pay-per-mile | Plug-in device tracking or compatible connected device | Required (OBD-II device) | 250 miles/day (road trip exception) | Very low-mileage drivers who want usage-based pricing |
Lowest average rates for most drivers
Easy-to-use online tools for policy management
Traditional discount approach with no technology requirements
Multiple stackable discounts (multi-policy, safe driver, vehicle safety features)
Simple qualification process through self-reported mileage
Limited to traditional discount programs (no pay-per-mile options)
May require periodic mileage verification
May not offer maximum savings for extremely low-mileage drivers
GEICO is the cheapest car insurance option. Because of its low rates and easy-to-use online tools, we rank it among the best car insurance options for low-mileage drivers. A GEICO policy costs an average of $1,223 per year or approximately $102 per month. The company also offers a telematics discount.
**NOTE: The rates above are for 12,000 miles annually, which reflects standard driving. While this is more than the 7,500 miles per year average for low-mileage car insurance, it served as the baseline for cost comparison.
Offers low-mileage discount (<7,500 miles)
The Drive Safe & Save program offers potentially larger savings
Local agent network for personalized guidance
Flexibility between traditional and technology-based programs
May have higher base rates than some competitors
Traditional discounts require mileage proof
Drive Safe & Save program availability varies by state
State Farm is our best car insurance company for drivers looking for low-mileage discounts. The company offers a $115 discount, which brings its average low-mileage premium from $1,643 to $1,528 per year ($127 per month). That said, the lower average cost is still $305 more than GEICO's rate.
State Farm also has a usage-based insurance program, Drive Safe & Save. This can give you up to 30% discount on your premium.
**NOTE: The rates above are for 12,000 miles annually, which reflects standard driving. While this is more than the 7,500 miles per year average for low-mileage car insurance, it served as the baseline for cost comparison.
Just because a company offers a discount for a low-mileage plan doesn't mean they have the lowest rate. Comparing quotes from multiple insurers and evaluating different program types can save you more money than choosing the company with the best-advertised discount for low-mileage car insurance.
Pay-per-mile pricing that directly correlates costs with actual usage
Daily mileage cap of 250 miles protects against high bills during road trips
Substantial savings potential for consistently low-mileage drivers
Offers safe driving discounts
Available in 40 states
Requires plug-in device installation and ongoing technology use
Monthly costs fluctuate based on actual driving (less predictable)
May not be cost-effective for drivers with variable or higher mileage
Limited to vehicles with OBD-II ports (1996 and newer)
Not available in all states
Nationwide is the top choice for pay-per-mile car insurance. Available in 40 states, it's the most widely accessible option. The company's SmartMiles program can give you up to a 10% discount for safe driving. Nationwide also charges only for the first 250 miles driven per day, which benefits those who take occasional long road trips.
Many insurance companies also offer discounts for using apps that track your driving behavior through usage-based insurance programs. These programs reward people for safe driving habits, even if they don't drive less. However, these behavior-based programs require you to allow your insurance company to track you on the road. Drivers with privacy concerns may not want this type of discount.
Low-mileage car insurance isn't for everyone who drives less. It's designed for specific driver profiles who consistently maintain reduced annual mileage. Understanding which category you fall into helps you maximize savings and choose the right type of low-mileage coverage.
Mileage Threshold: Under 7,500 miles annually
Remote workers represent one of the fastest-growing segments of low-mileage drivers, having eliminated daily commuting from their driving patterns. These professionals drive around 3,000 to 7,500 miles annually for weekend errands, occasional meetings and personal trips.
Best coverage options include traditional low-mileage discounts, pay-per-mile insurance programs or usage-based insurance that tracks actual driving patterns. Verification may require employment confirmation of remote work status and periodic odometer readings.
Mileage Threshold: Under 7,500 miles annually (potential for highest savings with stacked discounts)
Retirees often experience the most dramatic reduction in annual mileage after leaving the workforce. They usually drive 2,000 to 6,000 miles per year for pleasure, medical appointments and visiting family. They can stack low-mileage discounts with senior discounts and defensive driving course credits for maximum savings.
Advantages include partnerships with organizations like AARP for members 50+, government employee discounts for retired federal or military personnel and multi-policy bundling opportunities. Verification may require retirement documentation and, if applicable, medical appointment schedules.
Mileage Threshold: Under 5,000 miles annually when the car stays home; varies when taken to school
College students present different low-mileage scenarios, particularly those who leave vehicles at home while attending school. Students keeping cars at home can qualify for "student away at school" discounts, requiring proof of enrollment and a school address 100+ miles from home.
Students taking cars to school often drive 3,000 to 8,000 miles annually and often get the best rates by staying on their parents' policies. In most cases, teens under 18 can't legally purchase auto insurance without a parent or guardian as a co-signer.
Good student discounts for maintaining grades can stack with low-mileage savings, and pay-per-mile insurance works well for occasional drivers living on campus.
Mileage Threshold: Under 6,000 miles annually
City residents who rely primarily on public transportation, walking or cycling for daily needs but maintain a vehicle for weekend trips, grocery shopping and visiting suburbs typically drive 2,000 to 6,000 miles per year. These drivers often pay premium parking costs, further incentivizing reduced vehicle usage.
Pay-per-mile insurance works particularly well for unpredictable but consistently low urban usage patterns. Verification can include public transportation records, employer confirmation of commuting method and residential address in areas with good public transit access.
Annual mileage is the primary qualification factor, but several additional criteria influence whether low-mileage insurance programs will benefit you financially.
Your driving patterns matter as much as total mileage. Consider these qualifying factors:
Several lifestyle factors enhance your qualification for low-mileage programs:
Your driving record and behavior patterns affect low-mileage program eligibility:
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 you qualify and actively seek a discount by following these steps.
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. For more accuracy, you can also review maintenance records from the past year and compare odometer readings to calculate your actual annual driving distance.
If you drive more than 7,500 miles annually, consider reducing your overall mileage by carpooling to work, walking to the store, using public transportation or finding other ways to consolidate trips. Consider remote work arrangements or lifestyle changes to help you qualify for low-mileage discounts.
Check with your insurance company and get quotes to see if you qualify for a low-mileage discount. Research different types of programs, including traditional discounts, pay-per-mile insurance and usage-based programs that use tracking technology. Compare requirements, savings potential and any technology needs for each option.
You'll need a few things when you apply. Take a photo of your odometer or write down the current mileage. If you have maintenance records that show how much you've driven over the past year or two, grab those too.
If you work from home or are retired, have documentation that proves it. Insurance companies want to ensure you're a low-mileage driver, so anything backing up your claim helps speed things along.
Discounts vary by insurer, so aside from your current insurer, consider multiple providers. Get quotes from at least three or four companies to see who gives you the best rate.
Be specific about your low-mileage status and ask about all available programs when requesting quotes to ensure you're getting maximum potential savings.
If you choose a usage-based or pay-per-mile program, you must properly install any required tracking devices or download necessary smartphone apps. Follow all setup instructions and allow for initial monitoring periods where the system learns your driving patterns before discounts take effect.
Insurance companies verify your low-mileage status through various methods. Initially, you may need to provide odometer readings or photos, show maintenance records or allow technology-based tracking to confirm your reported mileage. Ongoing verification often includes annual odometer check-ins, policy renewal reviews or continuous monitoring through telematics devices or smartphone apps.
When searching for the best and most affordable low-mileage car insurance policy, compare quotes from multiple providers offering different program types. This helps you get an accurate estimate of how much your plan may cost. Our calculator below can give you personalized quotes from different insurers in minutes.
MoneyGeek's car insurance calculator will give you a customized estimate of your auto insurance cost. It's free to use, requires no personal information and we won't send you any spam.
Rates updated:
Jun 30, 2025
| Insurance Carrier | MoneyGeek ScoreMG Score | Average Monthly Payment | |
|---|---|---|---|
| 1 |  Capital Insurance Group | 94 /of 100 | $87 |
| 2 |  GEICO | 82 /of 100 | $109 |
| 3 | 83 /of 100 | $118 | |
| 4 | 83 /of 100 | $129 | |
| 5 | 79 /of 100 | $133 | |
| 6 | 77 /of 100 | $151 |
Although MoneyGeek partners with some of the companies we recommend, our content is written and reviewed by an independent team of writers, editors and licensed agents. Learn more about our editorial policies and expert editorial team.
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 traditional low-mileage discounts and usage-based program options.
Understanding and avoiding frequent errors helps you maximize your low-mileage insurance benefits and prevent potential issues with your coverage or discounts.
Understanding how insurance companies calculate rates for low-mileage drivers helps you make informed decisions and potentially save money on your coverage. The pricing process involves multiple steps and factors that work together to determine your final premium.
Insurance companies calculate rates for low-mileage drivers using a systematic approach, combining traditional risk assessment with mileage-specific adjustments.
Insurers start by calculating your base premium using standard factors like age, driving record and vehicle type. This serves as the foundation for all subsequent adjustments and represents what you would pay without any mileage considerations.
Companies often classify drivers into distinct mileage tiers:
Insurance companies apply mathematical formulas to adjust your premium based on mileage data. The standard calculation follows this pattern:
Adjusted Premium = Base Premium × Mileage Factor × Other Rating Factors
The mileage factor usually ranges from 0.85 to 0.95 for very low-mileage drivers to 1.15 to 1.35 for high-mileage drivers.
Insurers incorporate additional discounts and fees to arrive at your final premium after applying mileage adjustments. Low-mileage drivers may see 5% to 20% reductions from their base premium, with some policies offering discounts of up to 40% for drivers with extremely low annual mileage.
Annual mileage plays a huge role in determining your car insurance premium, but it's not the only consideration. Insurers consider several other factors to calculate your final rate. Understanding these elements helps you identify additional opportunities for savings.
Your car's make, model, year and safety features influence rates regardless of how much you drive. Vehicles with strong safety ratings, low theft rates and affordable repair costs help lower premiums. The difference between the cheapest and most expensive vehicles to insure can be approximately $2,000 annually.
How you use your vehicle matters beyond total mileage. Drivers who qualify for "pleasure use" classification receive better rates than those with short commutes. Time-of-day driving patterns also affect rates, with peak-hour and late-night driving increasing risk assessments.
Age affects rates differently for low-mileage drivers. Younger drivers face higher premiums due to inexperience, but older low-mileage drivers may benefit from senior discounts that stack with mileage-based savings. Elderly drivers might see some rate increases due to age-related risk factors, though their lower annual mileage often offsets this.
Credit score emerges as one of the most influential pricing factors, often exceeding the impact of mileage itself. Poor credit can add hundreds to more than a thousand dollars annually to premiums. This is far more than the typical savings from low-mileage discounts. Improving your credit score can provide larger savings than reducing your annual mileage.
Where you live creates substantial rate variations, even for low-mileage drivers. Urban drivers often pay three to four times more than rural drivers in the same state due to higher accident rates, theft risk and repair costs. Moving between ZIP codes within the same city can change premiums by hundreds of dollars annually.
Multi-policy bundling can provide 10% to 25% additional discounts that combine with low-mileage savings. Other discounts include safety course completion, good student status and various membership affiliations. These discounts can often be stacked with mileage-based reductions for maximum savings.
State regulatory frameworks create dramatic variations in low-mileage insurance savings across the country. Some states mandate that insurers offer mileage-based pricing and consider annual mileage a primary rating factor. Other states rely primarily on market forces with minimal regulatory oversight, leading to inconsistent availability of low-mileage programs.
Taking advantage of a low-mileage discount can save you some money, but there are more effective ways to reduce your car insurance premiums and find the cheapest coverage options. Comparing quotes from multiple insurers and different program types, 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 helps you reduce your overall insurance costs.
Low-mileage drivers can save on car insurance through traditional discounts, pay-per-mile policies or usage-based insurance programs. GEICO consistently offers the most competitive overall rates for low-mileage drivers through its traditional discount program, while Nationwide leads the pay-per-mile market for very low-mileage drivers. State Farm might give you the biggest discount, but that doesn't mean you'll pay the least overall. Its regular rates could still be higher than another company's discounted price.
Maximize these savings by being honest about how much you drive and not getting caught up in who offers the flashiest discount percentage. A 30% discount sounds great, but if you're starting with a $2,000 premium, you still pay more than someone who gets 15% off a $1,200 insurance policy. As your circumstances change, periodically reassess whether your current program continues to offer the best value or if switching programs or carriers could provide better savings.
Below, we answer common about qualifying for discounts, the best program types for savings and whether pay-per-mile insurance is a better option for you.
To qualify for low-mileage car insurance discounts, most insurers consider under 7,500 miles per year as low mileage, but requirements vary by provider and program type. Some set limits as low as 5,000 miles annually, while others use 10,000 miles as their cutoff.
To determine which low-mileage car insurance program saves the most money, compare program options carefully. Traditional discounts provide predictable savings. However, usage-based and pay-per-mile programs often deliver the highest overall savings for qualifying low-mileage drivers.
Among major insurers, State Farm provides the largest discount at $115 annually, but GEICO offers the lowest overall premiums at an average of $1,223 per year.
To decide if pay-per-mile car insurance is right for you, consider your driving habits. Pay-per-mile insurance can be ideal for very low-mileage drivers who log fewer than 26 miles weekly. Traditional discounts often provide better value for drivers with slightly higher mileage but still qualify as low-mileage.
With low-mileage car insurance, drivers save $86 per year on average. Individual savings vary based on base premiums, chosen program type and specific driving patterns, with some policies offering discounts of up to 40% for drivers with extremely low annual mileage.
If you drive less than 7,500 miles annually, check if you qualify for low-mileage car insurance discounts. If you drive less than 26 miles per week, consider pay-per-mile insurance as well.
To verify low mileage, insurers use various methods, including odometer readings, telematics devices, smartphone apps or annual inspections, to confirm your actual driving patterns and maintain discount eligibility. Verification methods include annual odometer readings, periodic inspections, telematics devices, smartphone apps and self-reporting with spot checks.
If you drive more miles than you reported, exceeding your estimated annual mileage may result in a discount reduction or removal. To avoid policy complications, contact your insurer promptly if your driving patterns change.
Yes, telematics programs collect detailed driving data, including location, speed and time patterns. Review privacy policies carefully and consider discount-only programs that can't increase your rates.
Yes, most insurers allow you to stack multiple discounts, including low-mileage, multi-policy, safe driver and good student discounts, for maximum premium reduction.
Finding affordable car insurance when you don't drive much feels frustrating; you're paying the same rates as daily commuters despite putting far fewer miles on your car. We designed our research to identify which insurers reward low-mileage drivers with meaningful savings and which coverage levels make the most financial sense when you're not constantly on the road.
How We Analyzed Low-Mileage Driver Rates
We gathered 22,848 quotes from six major insurers across 100 ZIP codes to determine which companies offer the best rates for drivers who log fewer miles annually. Our data sources included state insurance departments and Quadrant Information Services, allowing us to compare real pricing across different coverage scenarios.
Sample Driver Profile
To estimate average car insurance costs across the U.S., we used a standardized driver profile:
While 12,000 miles per year reflects typical driving habits, we used this baseline to compare how rates shift across regions and coverage levels. From there, we identified how low-mileage car insurance options can lead to lower premiums for drivers with reduced annual mileage, especially those driving less than the national average.
Coverage Levels We Tested
For national averages, we analyzed 100/300/100 comprehensive and collision coverage with a $1,000 deductible. This means:
State-specific comparisons used 50/100/50 comprehensive and collision coverage with the same $1,000 deductible, representing more budget-conscious coverage levels that still provide solid financial protection.
Why This Approach Works for Low-Mileage Drivers
Lower annual mileage usually reduces accident risk, but not all insurers price policies accordingly. Our methodology identifies companies that recognize this reduced exposure and pass savings on to customers who drive less. The comprehensive and collision coverage we tested, often called "full coverage," ensures you're protected financially whether your parked car gets damaged or you're in a rare accident.
This research helps you avoid overpaying for coverage when your driving patterns suggest you should qualify for better rates.
Learn more about MoneyGeek's methodology.
About Rachael Brennan
Rachael Brennan is a licensed insurance agent with over a decade of experience in the industry. She holds a property and casualty (P&C) license across all 50 states and a life, health, and accidental death and dismemberment (AD&D) license in New York and surrounding states. She writes personal finance and insurance content for MoneyGeek, specializing in property, casualty, health, life and accidental death and disability insurance.
Brennan earned her Bachelor of Science in Communications from Texas A&M University-Commerce. As a writer, she uses her insurance and personal finance experience to share practical knowledge and help people make informed financial decisions.
