You can lower car insurance quotes by driving less. But you might have to drive a lot less and shop around, according to a NerdWallet analysis.
Inside the numbers
NerdWallet looked at car insurance quotes for varying mileage levels from major insurance companies in New York and Florida. Mileage made a difference at certain levels for some carriers. For example:
- State Farm showed a 14.3% rate cut in Florida by going from 10,000 miles a year to 5,000 miles.
- Liberty Mutual rates fell 6.4% in Florida when mileage dropped from 10,000 miles a year to 5,000.
- Geico offered 6.2% savings in New York for drivers who went from 10,000 miles a year to 5,000 miles
- Geico rates fell another 6.8% when mileage dropped from cut from 5,000 miles to 2,500.
But mileage didn’t impact rates much or at all in most cases. That matches the experience of F. Michael Conte, a partner at the Honig Conte Porrino Insurance Agency in New York.
“I’ve never found that to be a big factor,” he says, adding that asking people about mileage is mostly a way to get at how you use your car. So if, for example, you use your car just for pleasure, but then indicate that you drive 13,000 miles a year, an insurance company might get suspicious.
California, for its part, actually requires insurers to consider estimated annual mileage in setting rates.
In addition to the differences in rates, some companies offer low-mileage discounts:
- Safeco Insurance says members who drive fewer than 8,000 miles a year can save up to 20%.
- Travelers’ IntelliDrive program provides discounts starting at under 13,000 miles annually, with a potential savings of 30%, although savings depends on the state.
- Metromile charges a base fee plus a per-mile rate, although it’s offered only in a limited number of states.
Several other companies have usage-based insurance programs that provide savings based on mileage and driving behavior, tracked using in-vehicle technology. Allstate, for instance, says mileage is the most important factor in its Drivewise program, with drivers saving the most when they drive at or below 12,000 miles annually but still able to “realize some benefit” at up to 15,000 miles driven.
“The general buzz in the industry is that eventually we’re all going to go to mileage-based policies,” Conte says.
The average driver logs 13,476 miles a year behind the wheel, according to the Federal Highway Administration. Men tend to drive much more than women, averaging 16,550 miles a year, compared with 10,142 for women. Men’s driving peaks at ages 35 to 54, when men drive an average of 18,858 miles a year, while while women’s driving tops out at an average 12,004 miles a year when they are 20 to 34.
How to save on your car insurance quote
Based on NerdWallet’s findings, you can save if you don’t drive much by getting car insurance quotes from several companies and asking about low-mileage discounts and programs.
Those looking to save money by driving less have a variety of options, including telecommuting, walking, cycling, using public transit, ride sharing and car sharing. Many people use some combination of these options, mixing it up based on the purpose of each trip they take.
If, on the other hand, you drive a lot, it can pay to shop around for a company that doesn’t charge more based on mileage.
Updated Feb. 25, 2016
Photo via iStock.