What is a Low-Mileage Auto Insurance Discount?

There are some interesting ways to lower your car insurance premiums, and one of them is simply driving less. The less you drive, the lower the risk of an accidental crash or collision.  

A low-mileage auto insurance discount is a rate reduction offered to drivers who log fewer annual miles, typically around 7,000 to 7,500 miles per year, depending on the insurer. It’s a great option to save money if you drive your car occasionally, work from home, or rely on public transportation.

How Much Can You Save With a Low-Mileage Auto Insurance Discount? [H2]

If you drive about 7,500 miles per year, you can save from 5% to 20% on your annual car insurance premium. Well, that’s the standard discount that’s usually offered, but some insurers even provide 30% to 40% low-mileage auto insurance discount.  

With the standard low-mileage auto insurance discount of 5% to 20%, you can expect to save from $85 to $700 per year. If you manage to secure a higher low-mileage discount of 30% to 40%, it’s possible to save $1,000 or more on your auto insurance premium, depending on how much you drive and how much coverage you’ve purchased. 

The amounts stated above are just estimates based on the industry average; your actual low-mileage auto insurance discount will depend on your insurer, mileage covered per year, your driving records, insurance claims history, age, and other factors.  

Keep in mind that the low-mileage discount is only for drivers who actually drive less. So, if you drive about 7,500 per year (625 miles a month) or less, then you should apply for it.  Remember, the discount offered for low-mileage auto insurance varies from one insurer to another.  

To maximize your savings, you should consider exploring a reliable auto insurance provider that offers affordable car insurance premiums with a wide range of coverage options. Alongside a low-mileage discount, you can also combine other car insurance discounts, such as a safe driver discount or a good student discount, to reduce your premiums even further.

Who Benefits the Most from Low-Mileage Auto Insurance Discount?

Low mileage auto insurance discount mainly benefits drivers who drive infrequently, typically covering lower mileage. To get the low-mileage auto insurance discount, you need to purchase telematics insurance coverage, which is also known as a usage-based discount on car insurance.  

If you’re in a dilemma about whether you should opt for the low-mileage discount coverage or not, it’s essential to first ensure that you truly drive less with an average annual coverage of 7,500 miles or less. Based on industry data, the following groups tend to benefit the most from low-mileage auto insurance discounts.

Occasional Drivers

If you drive your car only for short errands, weekend trips, or occasional outings, you’re an ideal candidate for a low-mileage discount. Since you spend less time on the road, your risk of getting into an accident is lower, which translates to cheaper premiums. 

Remote or Hybrid Workers

With more people working from home or in hybrid setups, many no longer commute daily. If you drive only a few times a week for work or personal errands, you can easily qualify for a low-mileage discount and save significantly on your insurance costs.

Regular Public Transport Users

If you frequently rely on public transportation like buses, trains, or rideshares and only use your car occasionally, you can benefit from a low-mileage discount. Since your vehicle stays parked most of the time, your insurer may consider you a lower-risk driver and reward you with lower premiums. 

College Students Living Away from Home

Students who attend college far from home and leave their cars behind can qualify for a low-mileage discount under their parents’ policy. Since the vehicle is rarely driven, it’s considered low-risk, helping parents save on overall insurance costs. If you’re a student living 100 miles away from home, you should consider exploring the student away at school discount to save more on your parents’ car insurance policy. 

Classic or Luxury Car Collector

If you own a classic or luxury car that you only drive occasionally, you could benefit from a low-mileage discount. Think about it; you can easily save a substantial amount on your classic or luxury car insurance premiums, especially if they’re rarely driven and are parked in the garage most of the time.

Eligibility Requirements to Get Low-Mileage Auto Insurance Discount

If you’re interested in getting a low-mileage auto insurance discount, it’s important to know the eligibility requirements to qualify for this discount policy.  

Drive Less Than the Mileage Threshold

To qualify for a low-mileage discount, you’ll generally need to drive 7,500 miles or fewer per year (some insurers may allow up to 10,000 miles). According to the U.S. Federal Highway Administration, the average U.S. driver logs 13,476 miles per year, so if you consistently drive less than most drivers, you’re more likely to qualify for this discount. 

Proof of Mileage Covered

You will have to document your annual mileage through an odometer reading, or use a telematics device, or a smartphone app. Accurate mileage tracking ensures that you qualify for the discount, which includes current odometer reading, annual mileage estimates, actual distance covered, and driving records of the previous year.

Your Driving Record

Insurers usually require you to have a clean driving record with minimal accidents or traffic violations. Fewer claims show that you’re low-risk, which supports your eligibility for the discount.

Your Car Needs to be in Good Condition

While it’s a core requirement to drive less, it's also necessary to ensure that your car is well-maintained. Some insurers may require proof of regular maintenance, especially for older or classic vehicles.

How is Mileage Tracked by Insurance Companies?

When you apply for a low-mileage discount, your insurer needs to verify how much you actually drive each year. If it exceeds the mileage threshold, you won’t be eligible for the discount, and if you already have the discount, it will be cancelled, as the key requirement is to maintain a limited mileage. So, it’s essential for insurers to accurately track your car’s annual mileage, and here’s how they do it.  

Odometer Readings

You may be asked to provide an odometer reading when you start your policy or during renewal. This is the simplest method and works well if you drive consistently under the mileage threshold.

Telematics Devices

Some insurers offer usage-based insurance programs that use a small device installed in your car. This device tracks your mileage, driving habits, and sometimes even speed and braking patterns. The more you drive safely and stay within mileage limits, the more you can save. 

Smartphone Apps

Many insurance companies now offer mobile apps that can monitor your mileage automatically. These apps track your trips and report your annual mileage directly to your insurer, making it easy to qualify for discounts without manual odometer readings.

Built-In Vehicle Features

Some modern cars come with built-in telematics or connected car features that track your mileage automatically. Insurers can access this data (with your permission) to verify your annual driving distance and calculate your discount.

How to Get a Low-Mileage Auto Insurance Discount?

Getting a low-mileage auto insurance discount is straightforward, but it requires you to let your insurer track your driving. This can be done through a telematics device, a mobile app, or your car’s built-in telematics features. 

While some insurers accept a simple odometer reading as proof, others may ask you to track additional details like mileage, acceleration, speed, and braking patterns. 

If you’re comfortable with tracking, here’s how to apply for a low-mileage discount. 

• Contact your insurer to request the low-mileage discount. 
• Provide a current odometer reading (a photo usually works). 
• Install or activate any required tracking device or system in your car. 

Once these steps are complete, your insurer can verify your mileage and apply the discount to your policy.

The Bottom Line: Is Low-Mileage/Usage Based Auto Insurance Worth It?

Yes, the low-mileage or usage-based auto insurance discount is definitely worth it only if you drive less than 7,500 miles per year. Ideally, if your annual mileage is 5000 miles or less, then it’s highly recommended to low mileage discount, as you may even get up to 40% discount on your car insurance premium.

Whether you manage to save 5%, 20% or 40%, the low-mileage discount can help you substantially reduce your car insurance premiums. While finding ways to lower your car insurance costs can feel overwhelming, understanding your options like this discount makes it easier to make smart choices.

If you want help finding an affordable car insurance policy tailored to your needs, contact us for a free quote today. Our agents will help you create personalized car insurance coverage that fits your needs and budget.

Frequently Asked Questions (FAQ 

Can I get a low-mileage discount if I drive multiple cars?

Yes, but the discount usually applies per vehicle. Each car’s mileage may be tracked separately, so low usage on one vehicle doesn’t automatically qualify for another.

Will a low-mileage discount affect my coverage in an accident?

No, a low-mileage discount only affects your premium. It does not reduce your coverage or the payout you would receive in the event of an accident. 

Do temporary changes in driving affect my low-mileage auto insurance eligibility?

Minor variations in mileage usually won’t affect your discount. However, if your annual mileage consistently exceeds the insurer’s threshold, the discount may be adjusted or removed.

Can I combine a low-mileage discount with other discounts?

Yes, many insurers allow you to bundle discounts, such as safe driver, multi-policy, good student, or defensive driving discounts, alongside your low-mileage savings.

How often do insurers check mileage?

This depends on the insurer and tracking method. Odometer readings are usually requested at policy renewal, while telematics devices or apps can track mileage continuously throughout the year.

Does parking my car most of the time affect my insurance premium?

Yes, driving less reduces your risk of accidents, which is why low-mileage discounts exist. Vehicles that spend most of the time parked may qualify for additional savings through low-mileage or usage-based programs.