Low Mileage Drivers Save On Auto Rates: Here's How

With the rise of remote work and more people staying closer to home, the number of low-mileage drivers is growing. Whether you're working from home, retired, or just driving less these days, the good news is that your lower mileage can translate into significant savings on auto insurance.

But how exactly can you take advantage of this growing trend? Let’s dive into the ways low-mileage drivers can cut their insurance costs and explore the different options available—such as pay-per-mile and usage-based insurance policies.

Why Mileage Matters for Your Insurance Premiums

Insurance companies calculate your premiums based on a variety of factors, and one of the big ones is how much you drive. The logic is simple: the more you’re on the road, the higher your risk of being involved in an accident. If you’re a low-mileage driver, you’re seen as a lower risk, and many insurers reward this with lower premiums.

On average, driving less than 7,500 miles per year qualifies you as a low-mileage driver in the eyes of most insurers. If you fall into this category, there are several ways to take advantage of your reduced time on the road.

1. Pay-Per-Mile Insurance: Pay for What You Use

One of the best options for low-mileage drivers is pay-per-mile insurance, also known as usage-based insurance (UBI). With pay-per-mile insurance, your premium is based on two factors:

• A base rate (determined by your age, vehicle, location, and other factors).

• A per-mile rate that’s added based on how much you drive.

If you're someone who only drives to run errands or for the occasional road trip, this type of insurance can offer significant savings. For example, if your per-mile rate is $0.05 and you drive only 500 miles a month, your additional cost would be just $25 on top of your base rate. The less you drive, the less you pay.

This model works perfectly for:

• Remote workers who no longer have a daily commute.

• Retirees who don’t need to drive as often.

• City dwellers who primarily use public transportation but keep a car for weekends or emergencies.

Tip: At Roadelo, we’re exploring usage-based insurance solutions that allow you to pay for what you use, giving low-mileage drivers a chance to reduce their premiums dramatically.

2. Telematics: Let Your Driving Speak for Itself

Another option is telematics-based insurance, which uses technology to monitor your driving habits. By installing a device in your car or using a smartphone app, your insurer can track your mileage, speed, braking, and overall driving behavior. If you’re a safe, low-mileage driver, telematics can lead to lower rates over time.

Telematics programs often provide instant feedback on your driving, rewarding you for safe practices and fewer miles on the road. This data helps insurers tailor premiums to how you drive rather than just who you are.

Example: A telematics system could track that you only drive 4,000 miles a year and that you rarely brake hard or speed, resulting in discounts of 10-30% on your premium.

3. Low-Mileage Discounts: An Easy Way to Save

Even if you’re not enrolled in a pay-per-mile or telematics program, many insurers offer low-mileage discounts as a standard option. If you drive significantly less than the average driver in your area, you may qualify for a discount just by reporting your mileage at renewal time.

To qualify for a low-mileage discount, you’ll typically need to drive under 7,500 miles per year (or another threshold set by the insurer). You may be asked to provide proof of your mileage, either through odometer readings or telematics tracking, to verify your reduced driving.

At Roadelo, we help you explore all possible discounts based on your mileage, ensuring you get the best rate based on your actual driving habits.

4. Opt for Basic Coverage if You Rarely Drive

If you’re driving significantly less, you may not need full coverage. Consider whether basic liability insurance is enough for your situation. Liability coverage is typically cheaper than comprehensive or collision insurance, but it may not cover your car if it’s damaged in an accident or by external factors like theft or weather.

However, if your car is primarily parked at home, covered, or kept in a secure garage, you might not need collision or comprehensive coverage. Roadelo can help you assess your needs and decide whether scaling back your coverage makes sense based on your driving habits.

5. Bundle Your Policies for Additional Savings

If you’re already driving less and saving on your auto insurance, why not stack up the savings by bundling your auto insurance with other policies, like home or renters insurance? Many insurance companies, including Roadelo, offer multi-policy discounts that can further reduce your premium.

By bundling your policies, you can streamline your insurance needs while enjoying the perks of lower rates, especially when paired with a low-mileage discount or usage-based policy.

Who Benefits the Most from Low-Mileage Insurance?

The trend toward low-mileage insurance isn’t just for those who drive very little. It benefits anyone whose driving habits have shifted in recent years, including:

• Remote workers: No daily commute means fewer miles on the road.

• Retirees: If you’re no longer driving to work every day, your annual mileage likely drops.

• Frequent travelers: If you often travel for work or pleasure and leave your car parked for extended periods, low-mileage insurance can help you avoid paying for coverage you don’t fully use.

• Urban drivers: City dwellers who primarily rely on public transportation but keep a car for occasional trips can see significant savings.

The Bottom Line

If you’re driving less, there’s no reason to pay the same premiums as someone who’s on the road every day. By switching to a pay-per-mile or usage-based insurance policy, taking advantage of low-mileage discounts, or adjusting your coverage to reflect your driving habits, you can save a substantial amount on your auto insurance.

At Roadelo, we believe in making auto insurance work for your lifestyle. Whether you’re on the road every day or just occasionally, we offer flexible, affordable solutions to fit your needs. Get a quote today and find out how much you could save as a low-mileage driver.