Penny Gusner is a senior insurance writer and analyst at Forbes Advisor. For more than 20 years, she has been helping consumers learn how insurance laws, data, trends, and coverages affect them. Penny enjoys translating the complexities of insurance into easy-to-understand advice and tips to help consumers make the best choices for their needs. Her work has been featured in numerous major media outlets, including The Washington Post and Kiplinger’s.
Penny Gusner
Penny Gusner is a senior insurance writer and analyst at Forbes Advisor. For more than 20 years, she has been helping consumers learn how insurance laws, data, trends, and coverages affect them. Penny enjoys translating the complexities of insurance into easy-to-understand advice and tips to help consumers make the best choices for their needs. Her work has been featured in numerous major media outlets, including The Washington Post and Kiplinger’s.
Michelle is a lead editor at Forbes Advisor. She has been a journalist for over 35 years, writing about insurance for consumers for the last decade. Prior to covering insurance, Michelle was a lifestyle reporter at the New York Daily News, a magazine editor covering consumer technology, a foreign correspondent for Time and various newswires and local newspaper reporter.
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Michelle Megna
Michelle is a lead editor at Forbes Advisor. She has been a journalist for over 35 years, writing about insurance for consumers for the last decade. Prior to covering insurance, Michelle was a lifestyle reporter at the New York Daily News, a magazine editor covering consumer technology, a foreign correspondent for Time and various newswires and local newspaper reporter.
Editorial Note: We earn a commission from partner links on Forbes Advisor. Commissions do not affect our editors' opinions or evaluations.
Our analysis found that Nationwide, Travelers and USAA are the best companies for cheap low-mileage car insurance. We evaluated costs, collision claim processes, complaints and coverage choices of insurers nationwide to determine the best options for those who drive less.
If you work from home, are retired or just don’t take your car out much anymore, driving fewer miles should make you eligible for cheaper car insurance. Investing a few minutes to shop around for a low-mileage policy could help you save big.
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Show Summary
- Best Cheap Low-Mileage Car Insurance Companies
- Summary: Low-Mileage Car Insurance Ratings
- Can Low-Mileage Drivers Save Money on Car Insurance?
- What Are the Best Insurance Options for Low-Mileage Drivers?
- What Is Usage-Based Insurance?
- What Exactly Is a Low-Mileage Driver?
- Methodology
- Next Up in Car Insurance
Best Cheap Low-Mileage Car Insurance Companies
Summary: Low-Mileage Car Insurance Ratings
*USAA auto insurance is available only to members of the military, veterans and their families.
Can Low-Mileage Drivers Save Money on Car Insurance?
Low-mileage drivers can save money on car insurance. Less time on the roadway decreases your chances of being in an accident and making claims. Being less of a risk to insurers can result in cheaper car insurance rates.
Driving 3,000 miles a year compared to 16,000 will save you 5% a year on average, according to our analysis of car insurance rates. But with certain insurers, you can save even more.
Key factors that affect car insurance rates include your age, driving record, where you live, the type of car you drive and how many miles you drive annually. Car insurance rates can vary significantly among companies because they use different methods to determine prices. One of the best ways low-mileage drivers can save money is by shopping around and comparing quotes.
What Are the Best Insurance Options for Low-Mileage Drivers?
The best car insurance options for low-mileage drivers are Nationwide, Travelers and USAA, based on our analysis, which factored in costs, coverage options, complaints and collision repair..
When looking solely at costs for low-mileage car insurance, USAA is the cheapest (but is only available to those with a military affiliation). Travelers and Nationwide are the next cheapest companies—whether your annual mileage is as low as 3,000 or up to 11,000.
Low-Mileage Car Insurance Costs by Company
Pay-Per-Mile Car Insurance
Another option for low-mileage drivers is pay-per-mile car insurance. This type of policy takes into account the actual miles you drive, which gives you more control over what you pay.
A pay-per-mile car insurance policy has a daily or monthly base rate determined by traditional rating factors such as age, credit, driving record, location and vehicle. This rate typically remains constant, while your additional per-mile rate varies based on the actual miles you drive. If you drive less in one month, your rates will go down.
Pay-per-mile example: Say you have a $50 base rate with your pay-per-mile insurance and a $.07 per-mile rate. If you drive 400 miles in a month, you’ll pay a total of $78 that month (400 miles x $0.07= $28 + $50 base rate = $78).
Most pay-per-mile car insurance companies require you to use a smartphone app or a device plugged into your vehicle in order to monitor your mileage. Some insurers track your miles plus monitor and score your driving behavior. If your driving is considered then your base rate will fluctuate depending on your driving score. In that case, you will want to show excellent driving behavior and drive fewer miles annually to get the best rates.
Auto insurance companies offering pay-per-mile programs include:
- Allstate: With Allstate’s Milewise you pay a low daily rate plus a per-mile rate. In some states, driving behavior is also considered when calculating rates.
- Just Insure: Just Insure offers pay-per-mile insurance in Arizona. Besides miles driven, Just Insure also factors in driving behavior. It calculates a ScoreSafe rating. The better your score, the cheaper your cost per mile.
- Metromile: Metromile only offers pay-per-mile car insurance policies, which have a monthly base rate and per-mile rate.
- Mile Auto: Mile Auto does not track miles with an app or onboard diagnostic but instead has you send a photo of your odometer each month. You pay for the miles driven plus your base rate.
- Nationwide: SmartMiles has a monthly base rate plus a variable per-mile rate based on your actual miles driven.
- Noblr: Noblr is a USAA company, so you must have a military affiliation to buy a policy. Noblr has a fixed rate plus a variable rate based on how many miles you drive and how you drive.
Average Car Insurance Rates by Annual Mileage
What Is Usage-Based Insurance?
Usage-based car insurance programs use a mobile app or device to monitor your driving behavior and allow you to potentially garner significant discounts if you demonstrate that you’re a safe driver. The maximum potential discount for being scored as a safe driver varies by company but typically ranges between 20% to 40%.
Telematics for Low-Mileage Drivers
Usage-based car insurance is also called telematics, as it uses technology, such as your smartphone, to collect data about your mileage and driving behavior. Information monitored and scored varies by insurer but commonly includes:
- Acceleration
- Hard braking
- Hard cornering
- Miles driven
- Phone use while driving
- Speed
- Time of day car is driven
Tracked data is used to calculate a driving score and determine your discount—if you qualify for one.
A risk you run with usage-based insurance is not getting a discount due to a low score or—even worse—seeing higher rates with some insurers. For instance, Progressive’s Snapshot program may raise your rates if you’re deemed to have riskier driving behaviors. Progressive says rates go up for 20% of drivers who use Snapshot.
What Usage-Based Insurance Options Do Low-Mileage Drivers Have?
There are many options for low-mileage drivers looking for a usage-based insurance program, as most top car insurance companies offer one. There are also car insurance companies that only provide usage-based policies, such as Lemonade and Root.
If you want to try a usage-based insurance program, start by seeing if your current insurance company offers one and compare it to other usage-based programs out there.
Usage-Based Car Insurance Programs
What Exactly Is a Low-Mileage Driver?
A low-mileage driver is typically someone who drives fewer miles than the average. Motorists drive an average of nearly 13,500 miles annually, according to the Federal Highway Administration data. Males have a higher average rate of 16,550 miles annually, while females drive 10,142 miles annually.
There is no standard definition for a “low-mileage driver” that car insurance companies use. Each insurer has its own guidelines for what it considers low mileage. One company may consider anything under 12,000 miles a year as low mileage. Others may say annual miles should be under 10,000 or 7,500 a year.
For example:
- Your mileage must be 10,000 miles or less a year to obtain a low-mileage discount from Auto-Owners.
- A low-mileage discount from Safeco is for those driving less than 8,000 miles per year.
- State Auto offers a mature driver low-mileage discount if you’re age 65 or older and drive less than 3,000 miles a year.
Comparing car insurance quotes will help you find the best rates for the number of miles you drive each year.
Methodology
To identify the best low-mileage car insurance companies we evaluated each company on the following.
Auto insurance rates (50% of score): We used data from Quadrant Information Services to find average rates from each company for low-mileage drivers.
Unless otherwise noted, rates are based on a 40-year-old female driver with a new Toyota RAV4 and coverage of:
- $100,000 for injuries to one person, $300,000 for injuries per accident and $100,000 of property damage (known as 100/300/100).
- Uninsured motorist coverage of 100/300.
- Collision and comprehensive insurance with a $500 deductible.
Car insurance coverage options (25% of score): Any auto insurance company can provide the basics of liability insurance, collision and comprehensive coverage and other standard offerings. But it’s also important to have access to additional coverage types that can provide greater protection or cost savings. In this category we gave points to companies that offer accident forgiveness, new car replacement, vanishing deductibles, usage-based or pay-per-mile insurance and SR-22s.
Complaints (20% of score): We used complaint data from the National Association of Insurance Commissioners. Each state’s department of insurance is in charge of logging and monitoring complaints against the companies that operate in their states. Most auto insurance complaints center on claims, including unsatisfactory settlements, delays and denials. The industry complaint average is 1.00, so companies with a ratio below 1.00 have lower levels of complaints.
Collision repair (5% of score): We incorporated grades of insurance companies from collision repair professionals. We used data provided by CRASH Network, a weekly newsletter covering the collision repair and auto insurance market segments. CRASH Network’s Insurer Report Card has grades based on more than 1,000 collision repair professionals to gauge auto insurers on the quality of their collision claims service.
