Low‑mileage discounts: How much you can save on auto insurance

What is a low-mileage insurance discount?

A low-mileage insurance discount reduces the cost of a car insurance policy for drivers who travel fewer miles than average. Insurers set their own mileage thresholds and discount amounts. Many insurers consider drivers who travel fewer than 7,000 to 8,000 miles annually for this discount, although eligibility varies by company and state.

“The top end of most carriers to any amount of a discount is usually in that 7,000 to 8,000 annual mileage range,” says Janes-Bartley. “Meaning if you drive 6,800 miles annually, you might get a very small discount, and if you drive 3,000 miles annually, you might get a bigger discount.”

Low-mileage discounts are usually factored into your base rate. When you sign up for your car insurance policy, you provide your carrier with your estimated annual mileage. Your insurance company will give you a rate based on this information.

How much can you save with a low‑mileage discount?

Low-mileage discounts range from 2% to 20%, according to Insurance.com data. Drivers who travel fewer miles receive larger discounts. Your savings depend on your insurer, location, annual mileage, and starting premium.

Here’s a breakdown of the averages from top companies:

If you drive less than 7,500 miles a year: 7% to 20%, or $152 to $630 a year
If you drive 7,501-9,999 miles a year: 5% to 19%, or $138 to $617 a year
If you drive 10,000-11,999 miles a year: 4% to 12%, or $99 to $398 a year
If you drive 12,000 to 14,999 miles a year: 2% to 6%, or $47 to $207 a year
If you drive more than 15,000 miles a year: typically no discount

Who is eligible and who is excluded from low‑mileage discounts?

Drivers who travel fewer miles than the insurer’s annual mileage threshold are the main candidates for a low-mileage discount. Your work arrangement, commute, and regular driving habits help determine whether your annual mileage falls within the insurer’s limit.

People who qualify for this discount typically include those who:

Work from home or have a hybrid work schedule
Have a short commute or carpool
Are retired
Frequently use public transportation or walk

While there is nothing about a driver that excludes them from a discount, certain cars may be ineligible, such as:

Classic or collector cars
RVs and motorhomes

“Usually, the vehicles eligible cannot be collector cars, classic or antique cars, or motorhome-type vehicles,” Janes-Bartley says.

State‑by‑state low‑mileage discount rates

In some states, such as New Hampshire and Wyoming, insurers offer a discount of only about 5% for driving less than 7,500 miles per year. In other states, you can save as much as 14% (Georgia and Texas) and 17% (California). Discounts taper off the more miles you drive. As you can see from the table, when you drive 12,000 to 14,999 miles, you enter the 2% discount range in most states.

Mileage range	Before discount	After discount	$ difference	% difference
7500-9999	$2,167	$2,072	$95	4%
10000-11999	$2,167	$2,096	$71	3%
12000-14999	$2,167	$2,121	$46	2%
Under 7500	$2,167	$2,019	$148	7%

Low-mileage car insurance discounts by company

Farmers offers the largest dollar savings among other insurance companies in the comparison, at $597 a year. Nationwide has the highest percentage discount at 20%. USAA offers the lowest annual premium after the discount, at $1,437, but its policies are only available to eligible military members and their families.

The table below shows some average low-mileage car insurance discounts offered by various companies.

Company	Before discount	After discount	$ Difference	% Difference
Allstate	$3,159	$2,831	$328	10%
Farmers	$3,207	$2,590	$617	19%
GEICO	$2,159	$2,013	$146	7%
Nationwide	$2,524	$2,119	$405	16%
Progressive	$2,569	$2,431	$138	5%
State Farm	$2,875	$2,604	$271	9%
Travelers	$1,962	$1,755	$207	11%
USAA	$1,628	$1,539	$89	5%

How low-mileage car insurance discounts work

A low-mileage discount uses your estimated annual mileage to calculate a reduction in your rates. You provide your mileage when you apply for coverage or update your policy. The insurer then uses that information to determine your rate and whether you're eligible for a discount.

It’s essential to review your policy to determine the listed annual mileage; most companies assume an average of 12,000 miles per year, but others may set it at a higher or lower number. If your average mileage is lower, simply update your policy to receive the discount.

How low-mileage discounts differ from pay-per-mile insurance

Low-mileage discounts and pay-per-mile insurance are both ways for drivers to save based on their driving habits. However, they work differently.

A low-mileage discount is offered on a traditional car insurance policy and uses an estimate of your annual mileage to calculate a discount off the base rate.

Pay-per-mile insurance bases how much you pay each month on a base rate plus a per-mile rate, and charges you based on the actual miles you drive.

	Low-mileage discount	Pay-per-mile insurance
Rates are based on:	Base rate + per-mile rate	Base rate - percent discount
Mileage is based on:	An annual estimate	Tracking of actual miles driven
Miles are tracked by:	Policyholder	Device or app
Best for:	People who prefer a set bill each month and don’t want to track miles	People who are willing to pay a different amount each month based on actual miles

If you're curious as to how much you could save on a pay-per-mile program, try our pay-per-mile calculator to see an estimate based on your actual mileage.

FAQ: Low-mileage discounts

What happens if you exceed your estimated annual mileage?

If you drive more miles than you reported, your insurer will adjust your premium or remove the low-mileage discount, depending on its rules. Some insurers request updated mileage or supporting documents during the policy term or at renewal. Give your insurer an accurate estimate and report any changes in your driving habits.

How do insurance companies verify mileage?

Insurers verify mileage through odometer readings, service records, photos, third-party data, or mileage-tracking devices. The requirements depend on the insurer and the program. Some insurers request documentation only when they need to confirm an estimate, while pay-per-mile programs track driving through an app or device.

How do you calculate annual mileage for insurance?

You can calculate your annual mileage for insurance purposes in a couple of ways:

Odometer reading: Look at your odometer at the end of the month and multiply the miles traveled by 12.
Commute length: Consider your work commute and calculate the weekly distance, then multiply it by 52 to account for the number of weeks in a year. Remember to exclude weekends, but include any regular errands or other driving activities.