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You own a car and you drive that car, but you don’t drive it often, and you don’t drive it far. Did you know that you could be cashing in on your limited driving? Yep, you could actually save a lot of money on your car insurance because you don’t drive a lot. Many insurance providers offer discounts on car insurance to people who put a limited amount of miles on their cars – and those discounts can be really deep.low mileage discount

A recent study put out by conducted by Princeton Survey Research Associates International, which was commissioned by insuranceQuotes, determined that a mere 16 percent of American drivers have inquired about discounts on their car insurance. What does this mean to you? It means that if you only put a limited amount of miles on your car, you need to ask your insurance provider if they will offer you a discounted price.

How does it Work?

You are probably wondering why car insurance providers offer discounted rates to people who drive a limited amount of miles. Well, it’s actually quite simple: Your insurance rates – the amount you pay for your car insurance – is based on risk. In other words, the more you drive, the greater the risk that you will be involved in an accident. That being said, if you drive a limited amount of miles, you are considered less of a risk because you are less likely to be involved in an accident.

Using this logic, car insurance companies often provide the following discounted rates:

  • Discounts for low-mileage: If you drive under a certain amount of miles each year, your provider may offer you reduced premiums on your insurance.
  • Discounts for the amount you use your car: When you drive a limited amount of miles and you drive safely, your insurance provider may also offer discounts.

What Qualifies as “Low Mileage?”

There isn’t an exact answer to this question. Why? – Because every insurance company has a different definition of what “low mileage” is. With that in mind, a blanket answer to this question would be anywhere from 7,500 to 15,000 miles a year. So, if the amount of miles you put on your car each year falls in that range, there’s a chance that your insurance company may offer you a low mileage discount. The only way to find out if you really qualify, however, is to call your insurance provider.

When Should You Inquire About a Low Mileage Discount?

While there’s never a “right” time to ask if you are eligible for a low mileage discount, the best time to ask about one would be when you are going to sign up for a new policy. Your insurance provider will look at your past driving records to calculate if, in fact, you do put low mileage on your vehicle and if the mileage that you put on falls into their mileage cap. If it is found that you do meet your company’s requirements, they will more than likely offer you a discount.

You should be aware, though, that you can inquire about a discount at any time.

Who are Considered “Good” Candidates for Low Mileage Discounts?

There are certain groups of drivers that are more likely to qualify for low mileage discounts. Certainly, those who have a long commute to work or those who travel great distances probably aren’t going to qualify for a discount. Individuals that would be considered good candidates for a low mileage discount on their insurance include:

  • You are retired and therefore do not have a need to drive your car to-and-from work each day. When you eliminate the need to drive to-and-from work every day, you greatly minimize the amount of miles you put on your car each year, which would likely put you in the running for a low mileage discount.
  • You live close to your work or you work from home. Obviously, when you work close to home, you put less miles on your car, so that would up your likelihood of qualifying for a low mileage discount. If you work from home, your chances are even better, because, well, you don’t have a commute to contend with at all!
  • You become a member of a car pool. When you are in a car pool, the miles that you commute to work are shared between you and other drivers, which means that you are putting less miles on your car.

Again, it is important to note that every insurance provider has different qualifications in order to be considered for a low mileage discount. Your provider may require that you sign up for a usage-based program in order to track the miles that you drive and your specific driving behavior.

What is a Usage-Based Low Mileage Program?

What exactly is a usage-based program and how does it work? As the name suggests, this type of program is related to the amount you use your vehicle. In other words, your car insurance company will monitor how you use your vehicle and the type of discount you receive will be based on how you use your vehicle.

In order to assess your driving, your insurance provider will likely require you to attach a device to your car. This device will monitor:

  • How you drive your car, including what your average speed is and how hard you break (which determines how long you wait to stop your car.)
  • How many miles you drive
  • When you drive your vehicle

Depending on what your car insurance company deduces regarding how you use your vehicle, you could receive a discount as high as 50%!

In Conclusion

If you believe that you may be eligible for a low mileage discount on your car insurance, call your provider. It never hurts to inquire, and in fact, it’s far better to ask and be told that you don’t qualify than not ask when you could actually qualify for a reduced rate.