Annual mileage affects car insurance rates. Driving more increases accident risks and the likelihood of claims, leading to higher premiums. To save, reduce mileage by carpooling, using public transit or consolidating trips.
Auto Insurance
How Does Mileage Affect Car Insurance Rates?
Updated: March 19, 2025
Advertising & Editorial Disclosure
Key Takeaways
Higher mileage raises accident risks and car insurance rates, while lower mileage reduces costs.
Some insurers offer pay-per-mile policies, which are ideal for drivers with low annual mileage.
Providing accurate mileage helps avoid denied claims or overpaying for coverage.
Does Annual Mileage Affect Car Insurance?
What Is Considered High Mileage?
In car insurance, driving over 15,000 miles annually is often considered high mileage, exceeding the national average of 13,476 miles, according to the Federal Highway Administration. Insurers see higher mileage as a greater accident risk, leading to higher premiums. Most companies use 15,000 to 20,000 miles per year as a benchmark for high mileage.
Keeping your mileage below average can help lower your rates. For instance, driving under 7,500 miles annually can save you around $86 per year on standard coverage.
IS HIGH MILEAGE BAD?
Yes, insurers generally view high mileage negatively because spending more time on the road increases accident risks. They may charge higher premiums or deny low-mileage discounts to high-mileage drivers. However, some insurers offset this by offering usage-based insurance (UBI) programs focusing on driving habits rather than mileage alone.
Car Insurance Mileage Brackets
Car insurance companies classify policy costs into three mileage categories — low, average and high — each affecting premiums differently.
Low mileage
This category qualifies for the lowest insurance rates, typically covering drivers who travel 7,500 miles or less per year (roughly 20 miles per day or less). Insurers consider these drivers lower risk due to reduced time on the road.
Average mileage
Driving between 7,500 and 14,000 miles annually (about 20 to 41 miles daily) typically results in moderate insurance costs. Most drivers fit into this category.
High mileage
Drivers exceeding 15,000 miles per year (over 41 miles per day) fall into the high-mileage category, often facing higher premiums due to increased accident risk and vehicle wear.
Insurance companies often base rates on estimated annual mileage, but some offer usage-based insurance (UBI) programs that track actual driving habits. These programs can lower costs for responsible high-mileage drivers.
How to Calculate Annual Mileage for Insurance
Your annual mileage depends on your lifestyle and driving habits. To estimate it, review your car's official service records, which often include mileage data. If you don’t have these records, contact your mechanic, who may have a copy. You can also manually estimate your mileage using these steps.
- 1
Fill up your tank
Fill the fuel tank to the brim with fuel. Ensure you continue until the dispenser automatically cuts off.
- 2
Reset your meter
After filling the tank, find the trip meter and reset it to zero.
- 3
Follow speed limits
Maintain the speed limit. Speeding consumes a lot of fuel and may not give you an accurate estimate.
- 4
Drive around
Drive until the fuel tank is empty or almost empty. The time this takes will depend on how often and how far you typically drive.
- 5
Calculate the car mileage
Determine your mileage by dividing the miles covered, based on the trip meter reading, by the fuel used. You can refuel your car and repeat the method a few times to get a more accurate mileage estimate.
WHAT HAPPENS IF YOU GO OVER YOUR ANNUAL MILEAGE ON INSURANCE?
Exceeding the annual mileage listed on your car insurance policy can affect your rates, depending on your insurer and how much you exceed the estimate. Here's what to keep in mind:
- Minor overages: Slightly exceeding your estimated mileage usually doesn't lead to immediate penalties, but consistent underreporting can cause higher premiums at renewal.
- Significant differences: A large gap between your reported and actual mileage may result in an adjusted premium.
- Claim denial or policy cancellation: If an insurer finds you've intentionally misrepresented your mileage, it could deny claims or cancel your policy for providing false information.
Annual Mileage Car Insurance Coverage
Car insurance often costs less if you drive fewer miles. To lower your rates, consider telematics or pay-per-mile insurance, where premiums are based on miles driven. A limited-mileage policy is another option for those driving less than average.
Pay per mile or telematics
Pay-per-mile or telematics insurance suits low-mileage drivers, adjusting monthly costs based on miles driven. To save, aim to drive no more than 26 miles per week.
Limited-mileage policy
Limited-mileage policies cater to drivers with low annual mileage and are useful if you rely on rental cars. These policies provide coverage for a set mileage limit, with criteria varying by insurer.
Classic car insurance
Classic car insurance offers lower premiums since it covers infrequently driven vehicles, like a 1950s Chevrolet Cameo or classic Ford models. Consider this option to save on insurance costs for your vintage car.
MILEAGE-BASED POLICY AND TELEMATICS
A mileage-based policy uses telematics to monitor your driving, including hard braking, hard acceleration and other risky behaviors. To secure the best rates, aim to drive 7,500 miles or fewer annually.
Car Insurance Companies Offering Usage-Based Insurance
Metromile is one of the best car insurance providers for low-mileage drivers, offering true pay-per-mile rates that can help you save significantly. Below is a table featuring Metromile and other top insurers for affordable coverage based on mileage.
Company | Best For | Pay-Per-Mile Charges |
|---|---|---|
Metromile | Pure pay-per-mile coverage ideal for urban drivers | $29/month + about $0.06 per mile |
Nationwide SmartMiles | Flexible pay-per-mile insurance with full coverage options | Varies — base monthly rate + per-mile fee (rate depends on driver profile) |
Allstate Milewise | Reputable insurer offering a pay-per-mile option | Daily base rate + per-mile fee (varies by driver and location) |
Miles Auto | Simple pay-per-mile without tracking driving behavior | Low monthly base rate + fixed per-mile fee (varies by state and driver) |
Compare Insurance Rates
Ensure you are getting the best rate for your insurance based on your mileage. Compare quotes from the top insurance companies.
Compare Costs
Depending on where you live, you can find affordable car insurance by comparing costs across insurers if you are within the low-mileage car insurance bracket.
Know Your Mileage
Underestimating your mileage may cause an insurer to reject your claim in case of an accident, and overestimating may translate to higher premiums than expected.
Easy Quotes
It is easy to get multiple quotes and find the best rate.
Does Mileage Impact Car Insurance: Bottom Line
Mileage affects car insurance rates, with higher mileage increasing premiums. This article discusses how driving habits influence costs, strategies to lower mileage and options like pay-per-mile policies to save money.
Does Higher Mileage Increase Insurance: FAQ
Annual mileage significantly affects car insurance rates. MoneyGeek answered common questions about how mileage impacts premiums and provided tips to help you save.
Why are cars with longer mileage more expensive to insure?
Insurers charge higher rates for cars with higher annual mileage because of the greater risk of getting into accidents.
Can you save on insurance by having lower mileage?
You can save on premiums by maintaining low mileage, typically under 7,500 miles per year. However, mileage isn't the only factor insurance companies consider when determining rates.
Should I use usage-based policies?
If you drive infrequently, consider usage-based policies like pay-per-mile insurance to minimize your premiums.
Car Insurance Based on Mileage: Our Review Methodology
Study Overview
MoneyGeek looked into the average cost of pay-per-mile auto insurance from several companies. We also compared the cost of car insurance for different coverage levels and high-risk drivers.
Data Sources and Depth
MoneyGeek collected and analyzed 83,056 quotes from 46 insurers in 473 ZIP codes using information from state insurance departments and Quadrant Information Services.
Driver Profile
MoneyGeek analyzed auto insurance costs using an average driver profile. Factors like location, coverage needs and specific driver characteristics may influence these estimates.
A typical driver has the following characteristics:
- 40-year-old male
- Toyota Camry LE
- No driving infractions
- 12,000 miles driven per year
Coverage Levels and Deductibles Explained
MoneyGeek used standard insurance to analyze national averages, which includes 100/300/100 comprehensive and collision coverage. 100/300/100 means:
- $100,000 bodily injury liability per person
- $300,000 bodily injury liability per accident
- $100,000 property damage liability
We also calculate the average rates for each state. For this, we used 50/100/50 comprehensive and collision coverage, which has the following coverage levels:
- $50,000 bodily injury liability per person
- $100,000 bodily injury liability per accident
- $50,000 property damage liability
We calculate both national and state averages using a $1,000 deductible. The deductible is the amount you pay before your insurance covers a claim. For example, if you have a $2,000 claim, you'll pay $1,000, and your insurer will cover the remaining $1,000.
Learn more about MoneyGeek's methodology.
Car Insurance Based on Mileage: Related Articles
Auto Insurance
About Mark Fitzpatrick
Mark Fitzpatrick, a Licensed Property and Casualty Insurance Producer, is MoneyGeek's resident Personal Finance Expert. With over five years of experience analyzing the insurance market, he conducts original research and creates tailored content for all types of buyers. His insights have been featured in publications like CNBC, NBC News and Mashable.
Fitzpatrick holds a master’s degree in economics and international relations from Johns Hopkins University and a bachelor’s degree from Boston College. He's also a five-time Jeopardy champion!
Passionate about economics and insurance, he aims to promote transparency in financial topics and empower others to make confident money decisions.
sources
- Federal Highway Administration. "Average Annual Miles per Driver by Age Group." Accessed March 19, 2025.