How to Lower Your Car Insurance When You're Driving Less

Insurance companies charge based partly on how much you drive, so telling them your mileage has dropped can lower your premium

If you have started working from home, retired, or simply drive less than you used to, your insurance company is probably still charging you the rate for your old driving pattern. Most insurers let you adjust your annual mileage estimate, and doing so can reduce what you pay. The catch: you have to contact them and ask. They will not lower your rate automatically, and lying about your mileage to get a discount can void your coverage if you have a claim.

How much you save depends on how much less you drive and which company insures you. Some insurers offer bigger discounts for low-mileage drivers than others. A few companies also offer usage-based programs where they track your actual driving through an app or device, which can work well if your mileage is genuinely low and your driving habits are safe.

Key Takeaways

• Contact your insurance company to report a change in your annual mileage; most will recalculate your rate within days.
• Low-mileage discounts vary by insurer and by state, so the savings you get depends on who insures you.
• Usage-based programs track your actual driving and may save you money if you drive safely and infrequently, but they require installing an app or device.
• If you drive under 5,000 miles per year, ask your insurer whether they offer a dedicated low-mileage policy, which may be cheaper than adjusting your standard rate.
• Lying about your mileage to lower your premium can result in a claim denial if you are in an accident.

How mileage affects your insurance rate

Insurance companies use mileage as one factor in calculating your premium because drivers who spend more time on the road face higher accident risk. When you first bought your policy, you told your insurer how many miles you expected to drive per year. That number, combined with where you drive, how often you drive, and your driving record, helped determine your rate.

If your actual driving has dropped significantly—you left a commute, moved closer to work, or retired—your risk profile has changed. Your insurer is still charging you based on the old estimate. Reporting the change can lower your rate because you are now a lower-risk customer from their perspective.

The discount is not automatic. Insurers do not monitor your odometer or GPS. You have to tell them the change, and they will recalculate your rate based on the new mileage figure you provide.

Contacting your insurer to report lower mileage

Call your insurance agent or log into your online account and look for a section labeled "policy details," "coverage," or "personal information." Most insurers let you update your annual mileage estimate through their website or mobile app without calling. If you cannot find it online, a phone call to your agent takes five minutes.

When you report the change, be honest about your new mileage. Insurers may ask follow-up questions—why you are driving less, whether you have a second vehicle, whether you still commute. Answer truthfully. If you later file a claim and the insurer discovers you misrepresented your mileage, they can deny the claim or cancel your policy.

After you report the change, your insurer will recalculate your rate. Most companies apply the new rate to your next billing cycle, which may be days or weeks away depending on when your policy renews. Ask when the change takes effect so you know when to expect a lower bill.

Low-mileage discounts and how much they save

Not all insurers offer the same discount for low-mileage drivers, and the amount varies by state and by how low your mileage is. Some companies offer a discount if you drive under 10,000 miles per year. Others have a threshold of 7,500 or 5,000 miles. A few do not offer a mileage-based discount at all, though this is less common.

The size of the discount also varies. One insurer might reduce your rate by 5 to 10 percent if you drive under 7,500 miles per year. Another might offer 15 percent. There is no standard, so if you are shopping for insurance or have multiple quotes, ask each company what their low-mileage discount is and at what mileage threshold it kicks in.

If you drive very little—under 5,000 miles per year—some insurers offer a separate low-mileage policy that may be cheaper than simply adjusting your standard rate. These policies are designed for people who drive occasionally and may include different coverage options. Ask your current insurer whether they offer one, and compare the price to your adjusted standard rate.

Usage-based insurance programs for low-mileage drivers

Some insurers offer programs where you install an app on your phone or a small device in your car that tracks your actual driving. The insurer monitors your mileage, speed, braking, and time of day you drive, then adjusts your rate based on your real behavior rather than an estimate. If you drive very little and drive safely, these programs can save you money.

The trade-off is privacy. The insurer has access to detailed information about when and where you drive. Some people are comfortable with this; others are not. Read the program terms carefully to understand what data is collected and how long it is kept.

Usage-based programs work best if your actual mileage is low and your driving habits are safe. If you drive a lot or have aggressive driving patterns—hard braking, speeding, driving at night—the program may not save you money or could even raise your rate. Before enrolling, ask your insurer for an estimate of what you would pay under the program versus your current rate.

When to shop around for a better rate

After you report your lower mileage, compare your new rate to what other insurers charge for the same coverage. Some companies offer bigger discounts for low-mileage drivers than others, and you may find a better deal elsewhere. Get quotes from at least three insurers and compare the total premium, not just the discount.

When you get quotes, tell each insurer your actual current mileage, not your old estimate. This ensures the quotes are based on the same information and you can compare them fairly. Also mention any other changes in your situation—a move, a change in job, a different vehicle—because these affect your rate too.

If you find a cheaper rate elsewhere, you can switch insurers. There is no penalty for leaving before your policy renews, though you may lose any discounts you have built up with your current company. Factor in the cost of switching—some insurers charge a cancellation fee, though many do not—and decide whether the savings are worth it.

Documenting your mileage if you have a claim

If you report lower mileage and then file a claim, the insurer may ask for proof that your mileage is actually what you said. Keep records of your odometer reading when you reported the change, and track your mileage going forward. A photo of your odometer or a note in your phone with the date and mileage is enough.

If your actual mileage turns out to be significantly higher than what you reported, the insurer may adjust your claim payout or deny coverage. This is rare if you reported your mileage honestly, but it is why accuracy matters. If your driving habits change again—you go back to commuting, for example—report the change to your insurer so your coverage stays accurate.

Frequently Asked Questions

How much will my rate drop if I report lower mileage?

The amount varies by insurer and by how much your mileage dropped. Some companies offer 5 to 15 percent discounts for low-mileage drivers, while others offer less. Call your insurer or check your online account to see what discount applies to you, or get quotes from other companies to compare.

What if I drive less some months and more other months?

Report your average annual mileage to your insurer. If you drive 8,000 miles one year and 6,000 the next, report something in between or use the lower number if that is more typical. The insurer uses this estimate to set your rate, so accuracy helps, but small variations are normal and expected.

Can I get a refund if my rate should have been lower all along?

Most insurers will not refund premiums you already paid, but they will apply the new lower rate going forward. If you believe you were overcharged for a long time, contact your state's insurance commissioner's office to file a complaint, though refunds are not may provide.

Does a usage-based program affect my credit score?

No. Usage-based insurance programs track your driving behavior, not your credit. Enrolling in one will not affect your credit score. However, if you do not pay your insurance bill on time, that can affect your credit, just as with any other insurance policy.

What happens if I start driving more after reporting lower mileage?

Contact your insurer and report the increase. Your rate will go back up to reflect the higher mileage. If you file a claim before updating your mileage and the insurer discovers you are driving significantly more than you reported, they may deny the claim, so keep your information current.