As car owners, we are different in how we use our cars. While some take their cars for long rides daily, others only have short commutes. If you only take your car for short rides daily, the good news is you can save money on your car insurance.
Depending on your insurance company, car insurance providers have mouth-watering offers for cars with low mileage, usually up to 30% of regular premium.
This piece discusses how to have cheaper auto insurance for driving less and everything you should know about cheaper insurance for cars driven less than 25 miles per day.
How to Get Cheaper Car Insurance for Low Mileage
The first question you want to ask is if driving less helps lower your car insurance, and the straight answer is YES.
If you work from home or are retired, the chances are you drive less per day, so why should you pay the same premium with someone who takes his car for a long commute every day? This is where you enjoy a pay-per-mile insurance policy.
Insurance companies offer these rates because driving less means less risk of an accident. They believe if you drive less than 25 miles per day, your chances of falling victim to an accident are very low, hence the offer.
However, it is worth noting that your insurance company is interested in carrying them along whenever you decide to increase your mileage. Failure to inform them might lead to denial of your claim should your car be involved in a car accident.
How Much Influence Does Mileage Have On Auto Insurance Rates?
Different factors, such as clean credit history and driving record, play into estimating a car’s insurance rate, but commute length also has a say. How much influence mileage has on car insurance rates depends on the insurer, though.
For example, while USAA offers $2,482.69 and $2,591.91 for 10 miles commute and 25 miles commute per day, respectively, GEICO offers $3,162.64 for 10 miles and $3,267.37 for 25 miles.
This shows that the farther you drive, the higher your insurance charges, and though the difference in charges is not significant, huge mileage differences can have up to 5% in charges. Also, insurance providers pay attention to mileage differences differently. How much different one insurance company might have for a 5-mile difference might be different from what another one has, but the point remains, low mileage implies low charges.
However, it is not easy to know which company offers the best rates due to the several factors that play in. Hence, you want to consider different quotes from different providers with your driving needs.
Is Low Car Insurance Rate Possible with Low Mileage?
Yes, you can get low insurance rates by driving less. However, not all companies offer tangible discounts for less driving. According to a recent survey, only seven of the participating 249 companies offered considerable low daily mileage discounts.
However, drivers with clean zero-car-accident records and who are also above 25 enjoy the highest discount. Also, cars with functional airbags have lower charges. Combining these factors and others can result in up to 60% discount, based on your company of choice.
As a low-mileage driver, the best way to know what you stand to enjoy is to contact your insurance company and ask what discount they have for drivers who drive less than 25 miles per day.
It is also wise to check with other insurers, especially those with pay-per-mile car insurance. This helps you know the best offer available for you.
This is a good option for people with decent driving habits, as it helps them save money. However, this system uses a tracking device that monitors how you drive, meaning that the insurance company follows up with your driving. Hence, many people don’t see this as a good option due to privacy concerns.
It is wise to consider how you drive before settling for this option and if privacy is not your concern.
What to Know About Pay-Per Mile Auto Insurance
Before you go into pay-per-mile auto insurance, there are many questions to ask. Some of the questions include:
How Does It Work? Again, pay-per-mile insurance only considers how far you drive per day and has nothing to do with your driving behavior. Hence, even if you have a poor driving habit, you can still consider the pay-per-mile option. However, monitoring your distance covered might also mean installing a device in your car.
How Much Can You Save? There is no particular amount to save with a pay-per-mile insurance rate. Remember that insurance companies have different rates. However, these companies have a base rate, to which they only add a small charge per mile.
Is Pay-Per-Mile Insurance Worth It? It is important to note that this option is not for everyone but the best for those who commute less per day, covering low distance at the end of the year. Consider the pay-per-mile program an excellent option if you travel less than 25 miles per day and 8,000 per year.
Is There Any Bonus Coverage? Whether you get additional bonuses depends on your insurance company of choice. Hence, if you consider any coverage, such as collision and liability, as a priority, check with your provider first.
Who Buys The Tracking Device? This depends on which method the company chooses to follow up with your driving. If your insurer only uses a mobile app to monitor your mileage, then the app is installed on your phone. If the company decides otherwise but to install a device in your car, they buy it and send it to you.
Ensure you ask questions on whatever bothers you about your car insurance and understand what you are going into before signing up for the policy.
Pay-As-You-Drive Vs Pay-Per-Mile Auto Insurance Coverage: Any Differences?
It is worth noting that pay-as-you-drive insurance policy is different from pay-per-mile insurance. While pay per mile means how far you drive contributes to your rate, your driving behaviors influence your charges under usage-based insurance.
Common factors that play into pay-as-you-drive policy include speed, how often you hit the brake hard, and the time of the day you drive. Pay-per-mile is not bothered about any of these factors but only focuses on how long you drive.