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Best Car Insurance For Low Mileage Drivers in 2019

The fact that you have a car and need auto insurance may not mean that you drive your car a lot.  In today’s world, there are many different modes of transportation such as buses, subways, trolleys, trains, cabs, and rideshare.  If you live and work inside the city, you may find it easier to take public transportation to work. Yet, you cannot bear the thought of being without a car.  You are a low mileage driver and your car insurance premium should reflect the fact that you drive less than many other people.

There are several ways that low mileage drivers can save on their auto insurance premiums.  Some auto insurance companies give discounts to low mileage drivers. Others have low-mileage auto insurance policies often offered through their telematics program.  Still, others have pay-per-mile auto insurance which charge drivers by the mile.

Companies that Offer Discounts For Low Mileage Drivers

Low mileage is one of the most popular car insurance discounts that many car insurance companies offer.

State Farm offers a program called In-Drive which allows drivers who drive less than 7,500 miles annually to get a discount on their auto insurance. The device monitors how many miles you drive along with other parts of your driving habits. You can get up to a 10% discount off of your car insurance if the information that the device collects works in your favor. In addition, a consumer gets a 5% discount for signup .

National General offers a low mileage discount to current and future policyholders who drive less frequently than the typical driver.  You must be an OnStar subscriber with OnStar Vehicle Diagnostics. Furthermore, you must drive less than 15,000 miles a year.

American Family: Drivers with an auto insurance policy from American Family can qualify for a low mileage discount if they drive less than 7,500 miles a year.

Safeco offers low mileage discounts to its policyholders who drive less than 8,000 miles a year.  You can save up to 20% off your premium with the company.

To determine which company offers you the lowest rates, you have to compare your quotes from these companies.

>>MORE: The Best Pay-Per-Mile Car Insurance Companies

Pay-Per-Mile Auto Insurance Companies

Pay-per-mile auto insurance is a relatively new form of auto insurance that a number of auto insurance companies have begun to offer recently.  This type of auto insurance is specifically for low mileage drivers. However, instead of paying a lower premium rate if you keep your mileage below a certain threshold, you pay for each mile that you drive.  Thus, you do not have a set premium rate and your rate can vary each month.

Some new auto insurance companies specifically offer pay-per-mile auto insurance.  

Metromile

Metromile is a California based company that provides pay-per-mile auto insurance to eight states which include Arizona, California, Illinois, New Jersey, Oregon, Pennsylvania, Virginia, and Washington.  This company, which began business in 2011, claims to allow drivers who drive less than 10,000 a year to save money on their car insurance. The way that this auto insurance company works is that you pay a base rate and a variable mileage premium base every month.  Your base rate and mileage premium are calculated in the same way that other auto insurance companies determine your premium taking into account your age, your location, your driving record, your coverage options, your type of vehicle and more.

Key Selling Points: Metromile offers a selection of coverage options that is similar to traditional auto insurance companies.  Furthermore, drivers are in control of their car insurance bill

Drawbacks: Metromile has more complaints than the average auto insurance company of its size.  

Mile Auto

Mile Auto is a newer company that follows the Metromile model.  The company emerged in Oregon and Illinois toward the end of 2018.  Still its policies are backed by a national insurance company with an A- financial strength rating.  This company claims to be more interested in protecting your privacy than Metromile and the like. Therefore, instead of using a telematic device that you plug into the car, this company requires that you take a snapshot of your odometer once a month and send it in.  

Key Selling Points: For people concerned about their privacy, this company offers a good alterative to a telematic device.

Drawbacks: The company has not been in business long enough to have any reviews.  Moreover, it is only available in two states.

Traditional Auto Insurance Companies with a Pay-Per-Mile Option

In this age when companies and services need to add value for the consumer to stay competitive, some well-known established auto insurance companies have started offering a pay-per-mile option as a way for low mileage drivers to save money.

Nationwide’s SmartMiles

Nationwide recently began offering pay-per-mile auto insurance.  This insurance works by drivers connecting a telematics device to their vehicle to monitor their mileage similar to Metromile.  You pay a base rate plus a monthly mileage rate. Furthermore, all miles over 250 a day are free.

You must qualify for the traditional Nationwide auto insurance to use their pay-per-mile option. Yet, this is a great option for current Nationwide auto insurance customers if they do not drive much.  This may also be a good option for people looking for a reputable pay-per-mile auto insurance company.

Key Selling Points: Nationwide is a large established auto insurance company with excellent financial strength.  So, you do not need to worry about whether the company will still be around in a few years. You can get the same coverage options as with traditional Nationwide auto insurance.  

Drawbacks: You must qualify for Nationwide coverage.  Its pay-per-mile program has not been around long enough to have reviews.

Esurance Pay-Per-Mile

Esurance has started to offer pay-per-mile auto insurance in Oregon.  Again, it works similar to Metromile with a base rate and a variable monthly mileage charge.  Like Nationwide, Esurance is an established auto insurance company with superior financial strength.  The company offers its pay-per-mile policyholders the same coverage options as its traditional auto insurance policyholders.

Esurance’s program differs from Metromile, however, because Esurance requires a six-month commitment.  The company requires a down payment to start the pay-per-mile insurance. Furthermore, the company has a $50 cancellation fee if you end your policy before the end of the six-months.

Key Selling Point: Esurance is a strong company that will still be around in years to come.  Furthermore, any miles over 150 a day are free.

Drawbacks: You must sign up for six months so there is no way to try out the program for a month or two.  It is only available in Oregon. Moreover, Esurance’s claims satisfaction rating for its traditional auto insurance is rather low; the company will probably provide a less than desirable level of claims satisfaction for its pay-per-mile insurance as well.

AllState’s Milewise

AllState has also begun to offer pay-per-mile auto insurance in 12 states.  This allows consumers to get pay-per-mile auto insurance from a name that they can trust.   This pay-per-mile auto insurance differs significantly from Metromile and some of the others who use a monthly base rate and variable mileage fee.  With Milewise consumers obtain a prepaid account which is attached to one of their credit cards. The account is charged a daily fee. Furthermore, each trip is charged as soon as the trip is completed.  Consumers who qualify for AllState insurance can expect the same great coverage options.

Key Selling Point: AllState is a name you can trust in auto insurance.  Additionally, you can see how much each trip costs. Moreover, all miles over 150 a day are free.  

Drawbacks: The company’s telematic device collects more than just your mileage.  Furthermore, you cannot obtain any base rate information on the internet.

All these companies have their own strengths and drawbacks, the only way to know your lowest rates is to compare your quotes from these companies.

Auto Insurance Companies With Telematics

Most auto insurance companies will ask you about the approximate number of miles that you drive a week.  From this figure, the auto insurance company will come up with an estimate for the number of miles that you drive a year.  This yearly mileage will go into calculating your car insurance premium. Drivers that drive more miles will be charged a higher rate, whereas drivers that drive fewer miles will get a cheaper rate.   More mileage equals higher rates because auto insurance companies consider drivers that drive more to be at a higher risk for accidents due to the fact that they are on the road longer.

Drivers who drive less should consider installing a telematics device on their cars so that their car insurance company can give them breaks in their rate based on their lower mileage.  There are a number of auto insurance companies that have telematics devices to reward their policyholders for safe driving. These companies include:

  • Progressive offers SnapShot
  • AllState has Drivewise
  • State Farm has Drive Safe & Save
  • Esurance has DriveSense
  • Nationwide has SmartRide
  • Liberty Mutual has RightTrack

The auto insurance company may write you a policy that stipulates that you do not drive over a certain threshold mileage limit.  You attach the telematics device to your car to prove you stayed within your mileage limit. Moreover, these telematics devices keep track of your driving habits and auto insurance companies give drivers significant discounts for being safe drivers.  Be sure to ask your auto insurance company whether low-mileage will get you a reduction in your rates.

A Final Thought

Many drivers today do not use their own car as their primary mode of transportation.  These low mileage drivers may wish to save on the car insurance premiums. Some auto insurance companies offer discounts to low mileage drivers.  Depending on the insurance company, you may qualify for significant savings. Other auto insurance companies reduce good premiums in response to low risk and good driving habits which they measure through telematics devices.  Since driving less lowers your risk of accidents, you should ask the insurance company how much you can save with its telematics program. Moreover, pay-per-mile auto insurance has emerged. This type of auto insurance is being offered through both pay-per-mile and traditional auto insurance companies.  Consumers only pay for the miles that they drive allowing low mileage drivers to save money.

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