What effect does your annual mileage have on your car insurance premium? Find out more about the different types of low mileage car insurance
If you don’t use your car regularly or only cover limited mileage over the year, you’re already saving on fuel and maintenance costs. But if you only use your car for short trips, you want to pay as little as possible for your insurance too.
There are many reasons you might cover less mileage in your car than the average driver, whether your car is a second vehicle or if you’re retired and just use your car as a runaround. You might also search for a low mileage policy if you own a classic car that only comes out for shows or sunny weather, or if you’re a student who only drives during the holidays.
How to estimate your mileage
You may find it difficult to estimate how many miles you will do in a year, as you have to tell your insurer in advance before you take out the policy. But it’s important to be as accurate as possible so you can get the right price and make sure you’re covered.
The average driver covers around 8,000 miles per year, but don’t assume that’s the case for you too. Mileage can vary wildly depending on if you use your car to commute and do long trips, or if you only drive occasionally.
The most accurate way to tell how many miles you drive on average is to check your previous MOT or service certificates, as these list the mileage on your car each year. You can then use these figures to work out how many miles per year you do on average. If your circumstances have changed, for example you’re driving to a different place of work, you’ll need to take this into consideration.
Low mileage car insurance
Your insurance premium is determined by many factors, but insurers mostly base the price on what puts you at risk of making a claim — e.g. your driving experience, whether you’ve had any past accidents, and how many miles you drive. The logic goes that the more time you spend on the road, the more likely you are to have an accident, so you might think that if you drive fewer miles you will be charged less for your insurance.
However, based on past accident data some insurers may take it into consideration that drivers who cover very few miles are also less likely to know the road well, so may be more likely to be involved in an accident.
You might assume that by declaring a low annual mileage estimation to you insurer that you will be able to cut the cost of your premium — some dishonest drivers may even be tempted to declare lower mileage than they actually plan to cover. It’s important to note that making any dishonest declaration to your insurer is considered insurance fraud and will invalidate your cover. Due to this illegal practice, many insurers don’t actually take it into account if you enter a very low mileage when requesting a quote, and will just offer you a price based on a higher number of miles. Unfortunately this makes it harder to get cheap insurance if you are genuinely a low mileage driver.
But thankfully there are some insurers who offer specialist low mileage policies, while others will give a low mileage discount if you only cover a limited number of miles every year. Alternatively, you may want to consider ‘pay as you go’ insurance.
Pay as you go insurance
Some types of insurance policy, usually black-box based, put a particular focus on the number of miles you do when calculating the cost of your premium. These so-called pay as you go car insurance policies may be a good option if you don’t drive many miles per year. Some insurers will stipulate a limited mileage you will be covered for, and you can then ‘top up’ in blocks of 1,000 miles or so to ensure you’re covered if you go over your original expected mileage. You can learn more about pay as you go insurance in this guide.
Compare car insurance quotes
However many miles you drive per year, it’s important to consider all your options to ensure you get the right cover for your needs. Shopping around on a price comparison website like uSwitch can help you compare different cover side by side and could help you to find the cheapest deal. Get started by entering your car details below: