What’s the Best Car Insurance for Low-Mileage Drivers?

Let's take a look under the hood at how the number of miles you drive could help you save on your car insurance policy.

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low-milage drivers

Watch a few commercials for car insurance companies and it won’t be long before one promises “discounts for low-mileage drivers!” 

But you’re probably wondering—what is my actual annual mileage, how do I know if it’s considered “low,” and what’s it all got to do with my car insurance policy?   

At Lemonade Car, you pay based on how much and how well you drive. Your mileage is a major factor that goes into how we calculate your car policy price—among other factors like driving behavior and driving history. 

Think you might qualify as a low-mileage driver? Let’s take a look under the hood of what that means and how it could help you save on your auto insurance policy.

  • You can calculate the annual mileage of your car by taking the total number of miles the car has been driven—which you can find on the car’s odometer—and dividing it by the number of years since the car was manufactured.
  • At Lemonade Car, you could be considered a low-mileage driver if you drive less than 9,000 miles per year.
  • With a pay-per-mile insurance program policyholders pay a monthly base rate that doesn’t change, in addition to a per-mile rate that’s charged based on how many miles are driven month-to-month.
  • Premiums for low-mileage drivers tend to be cheaper because if you’re on the road less, you may have a lower chance of causing (or being the victim of) an accident.

What is annual mileage?

Annual mileage refers to the average number of miles a car is driven in a year’s time.

To get this figure, take your car’s total mileage—check the odometer—and then divide it by the number of years since the car was manufactured. Don’t know when your car was made? You can usually find this info on the driver’s door jamb.

Annual mileage is important for determining a car’s value and insurance costs, among other things. While your annual mileage can vary each year, the average is usually the important number.

How does my car insurer know my annual mileage?

When you’re shopping around for car insurance quotes, some car insurance providers may ask for an estimate of your total mileage. They may later ask you to verify it with an annual odometer reading.

When you buy a Lemonade Car policy, your estimated annual mileage is a major factor that helps us fairly price your policy from the get-go. We may ask you how much you expect to drive your car over the next year. It’s fine to estimate based on your past mileage if you don’t foresee any big changes with the way you use your car.

Once you enable location services on the Lemonade app, we use telematics to help fairly price your coverage based on the number of miles you actually drive, along with other factors like your driving habits and driving history. We also use your mileage to calculate how many trees we should plant to help clean up your carbon emissions from driving.

What is considered low mileage for car insurance?

what's considered low mileage drivers for car Insurance
Drive less than 9,000 miles a year? You could qualify for discounts with Lemonade Car.

The definition of low mileage is pretty straightforward: driving fewer miles than average, in relation to how old the car is. Because the car’s driven less, there’s less wear and tear on the vehicle, and there’s a lower likelihood of being in an accident. 

According to a 2019 report by the U.S. Department of Transportation Federal Highway Administration (FHWA), the average American driver racks up around 14,263 miles annually, or about 39 miles per day.

These figures dipped in 2020 due to the COVID-19 pandemic as many drivers stayed home. The numbers are creeping back up, but haven’t reached pre-2019 levels again as many Americans are simply driving less.

Typically, most insurers consider driving less than 7,000 miles a year—about 19 miles a day—to be low mileage. That’s about half of the national average.

At Lemonade Car, you could already be eligible for savings based on your mileage if you drive less than 9,000 miles a year—not to mention the additional savings you could score for safe driving and a clean driving record.

What is pay per mile car insurance?

Pay per mile is another type of car insurance that can offer low-mileage drivers lower auto insurance rates. Driving with pay per mile is different from a traditional policy based on how the premium is calculated.

Policyholders pay a monthly base rate that doesn’t change, in addition to a per-mile rate that’s charged based on how many miles are driven each month. 

With these types of programs, the driver’s mileage is usually determined using a mobile app or a plug-in telematics device in the car. Like traditional car insurance programs, pay per mile policies still include the same insurance coverage options—like standard liability coverage, and comprehensive and collision coverages (if you’re confused about those distinctions, we clear it up here).

Why does average annual mileage affect car insurance?

It’s true that if you’re behind the wheel less than the average American driver, insurance companies will often reduce your car insurance rates. That’s because if you’re on the road less, you have a lower chance of causing (or being the victim of) an accident. It’s just statistics—even if you’re the best driver on the road, being behind the wheel itself increases the probability of someone else hitting your car.

Another perk of low-mileage driving is that putting fewer miles on your car leads to less wear and tear. So, a car that has fewer miles on it is likely in better shape than one that’s been beat to heck. If you are in an accident, it could have less damage and repairs would cost less. 

Could I be eligible for a low-mileage discount?

From teenagers to retirees, carpoolers to digital nomads—there’s no single low-mileage driver profile. But what they all have in common is that they spend less time behind the wheel than the average driver. 

Again, drivers who are behind the wheel fewer than 9,000 miles a year (around 22 miles daily) could qualify for a low-mileage discount at Lemonade Car.

What sorts of drivers fall into that category? Let’s take a spin through a few common low-mileage lifestyles. If you recognize yourself in any of these descriptions, it may be worth considering if your current car insurance policy is the right fit for your driving habits.

You work from home or don’t commute to work regularly

If you spend most of your time working from your home office or your favorite walking-distance coffee shop, you likely rack up fewer miles than a driver who commutes daily. 

At Lemonade Car you could save on your car insurance premium if you’re one of these WFH lifers. Use that hard-earned cash instead to enjoy an artisanal smoothie bowl between Zoom meetings at the cafe next door, or get your pet the gift of their dreams

You regularly take public transportation or ride share 

Prefer the commuter train or a Lyft to endless gridlock traffic or parking headaches?

The more time you spend taking public transit and ride sharing is less time you spend behind the wheel—and the more you could save on car insurance. 

Worried the Lemonade app won’t know the difference between when you’re in the driver’s seat, sitting on a bus, or riding your e-bike? When you use the Lemonade app the motion sensors in your phone are able to pull enough information to determine, with high accuracy, whether or not you’re driving your car.

You’re a college student

If you’re in college, you might not be hitting the road all that much. Say you’re living on campus with a car, but it stays parked most of the time while you’re buried in lectures and cramming for exams. 

If you spend more time in the chemistry lab, library, and your dorm room than on the road, you might be spending too much on a car insurance policy that isn’t right for your low-mileage lifestyle. Lemonade Car may offer lower rates if your course load keeps your mileage down. 

You’re a golden-aged driver

When you’re a retiree, you have so much to look forward to now that long commutes to the office are in the rearview mirror. (And you probably don’t miss them.)

Taking on a new hobby at home and making an impact in your community through local volunteering projects likely won’t put a lot of miles on your car. If your day-to-day activities are closer to home now and don’t always require a car to get there, you may be eligible for low-mileage savings with Lemonade Car. 

Drive less and save…

When you’re a safe driver that keeps your mileage low, Lemonade Car can help you save on your car insurance premium. And not only is low-mileage driving better for your wallet, it’s also better for the environment. The less you drive, the fewer greenhouse gas emissions you put into the atmosphere. 

Driving with Lemonade Car also means we’ll also plant trees to help clean up the effects of the miles you do drive. Overall, it’s a real win-win for your finances and the planet. Click below to get your quote rolling now.

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Please note: Lemonade articles and other editorial content are meant for educational purposes only, and should not be relied upon instead of professional legal, insurance or financial advice. The content of these educational articles does not alter the terms, conditions, exclusions, or limitations of policies issued by Lemonade, which differ according to your state of residence. While we regularly review previously published content to ensure it is accurate and up-to-date, there may be instances in which legal conditions or policy details have changed since publication. Any hypothetical examples used in Lemonade editorial content are purely expositional. Hypothetical examples do not alter or bind Lemonade to any application of your insurance policy to the particular facts and circumstances of any actual claim.