Low Mileage Discount: How You Can Save Money by Driving Less

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The recent rise of remote work and changing travel patterns has thousands of drivers suddenly spending less time on the road. This decrease in driving may now qualify you for a new type of auto insurance discount: the low mileage discount. 

Since the amount of time you spend on the road is one of the factors insurers use to calculate your insurance rate, the fewer miles you drive, the cheaper your premium is. For drivers who don’t spend a lot of time on the road, low-mileage car insurance discounts offer the opportunity to reduce their annual premium costs.

By knowing your usage patterns and which coverage is right for you, you can optimize your policy and get the best deal. Let’s explore traditional low-mileage discounts and pay-per-mile programs to help keep your car insurance premium low.

Key Takeaways

  • Low-mileage car insurance discounts are available to those who put fewer miles behind the wheel than most yearly.
  • Most insurance companies offer traditional low-mileage discounts, while you can sign up for a pay-per-mile insurance plan with some newer insurers. 
  • Drivers who don’t meet the low-mileage threshold can enjoy savings with pay-per-mile insurance or telematics programs.

What is a Low Mileage Insurance Discount?

A low mileage insurance discount is available for people who spend less time on the road. According to 2020 United States Federal Highway Administration data, the average driver travels just over 14,200 miles per year, roughly 1,183 miles per month. If your annual mileage is less than the national average, you may be considered a low-mileage driver. 

Who is a Low Mileage Driver?

Generally, insurance companies classify low-mileage drivers as those putting less than 7,500 miles annually on their vehicles. You might fall into this category if you’re newly retired, working from home daily, or taking public transportation regularly.

However, the definition of “low-mileage” varies by insurer, as do the available discounts. Insurance companies offer you lower premiums because they believe the fewer miles you drive, the lower your chance of being in a collision. Therefore, you pose less financial risk to the insurance company. Many insurers offer a discounted rate for those who drive fewer than 7,500 miles annually or less than 10 miles per workday.

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Who is Eligible for a Low Mileage Insurance Discount?

Each insurer will use its own criteria to determine who qualifies for the low mileage discount. Some companies consider anything under 12,000 miles a year to be low mileage, while others feel that anything under 10,000 is acceptable. Although each company may vary, people who drive fewer than 7,500 miles per year are usually eligible for this discount.

To find out if you’re eligible, you should speak directly to your insurance company. Give information about your driving history, driving habits, and yearly miles. 

Some auto insurance companies may also have specific eligibility criteria for low mileage discounts, such as minimum and maximum annual mileage limits and restrictions on certain types of vehicles. 

How to Sign Up for the Low Mileage Insurance Discount

Before enjoying the savings with this discount, you must determine if your auto insurance provider offers it. You can contact your insurance company, visit their website, or consult a licensed insurance agent.

During the sign-up process, you’ll need to provide information about your vehicle, such as the make, model, and year, and the average number of miles you drive per year. Your insurance provider may also ask you to install a device to track your mileage and verify your low mileage status.

Auto Insurance Companies Offering the Low Mileage Insurance Discount

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Many auto insurance companies, including State Farm, Allstate, and Nationwide, offer a low mileage discount. The discount amount can vary depending on the insurance company and the individual driver, so comparing quotes from multiple companies is essential to find the best deal.

In addition to low mileage discounts, some insurance companies also offer telematics and pay-per-mile insurance programs. To help you out, we’ve put together a few great options for drivers searching for low-mileage discounts.

State Farm

State Farm is a well-known insurance company offering eligible customers a low mileage discount. Drivers who don’t have long commutes or spend much time on the road benefit from the discount since they have a lower risk of accidents or incidents. The discount amount you’ll get depends on where you live and other factors such as your age and gender

State Farm also offers a telematics program. With State Farm Drive Safe & Save, drivers can save up to 30% on car insurance. Drivers can download State Farm’s mobile app or use the Connected Car feature if they own a 2020 or newer Ford or Lincoln vehicle.

When you renew your policy, State Farm will use your Drive Safe and Save data to determine how safe your driving has been. It measures elements like acceleration and braking and will apply a discount to your policy based on your behaviors.

However, this program may not be a good fit for you if you frequently drive long distances, aren’t comfortable being tracked by your insurance company, or regularly drive in heavy traffic. 


Allstate is an affordable auto insurance provider offering various insurance products and services. The company provides a telematics program called Drivewise, which tracks your driving behavior on the road using either a device installed on your car or your mobile device. The data collected is used to determine whether or not you qualify for a cheaper premium. 

Drivewise differs from other usage-based programs. Let’s say you drive poorly on a single trip, but you typically have safe driving habits. Drivewise allows you to delete specific data to prevent it from affecting your discount. 

You can download the app and use Drivewise to exchange safe driving data for Allstate Rewards points. Then, you can redeem points for gift cards, promo codes, and deals. The Allstate Milewise program might be a good fit if you don’t drive regularly. 

Allstate offers an alternative option called Milewise for low-mileage drivers. Milewise is a pay-per-mile program that charges policyholders based on how many miles they drive rather than how well they drive. 

Users pay a flat daily fee plus six cents per mile driven. It’s an excellent choice for retirees or remote workers with more control over the miles they drive yearly. 


Nationwide is known for its excellent coverage and service and offers different ways to save money if you don’t drive much. The company’s premiums take mileage into account, with rates 25% lower for customers who drive less than 7,500 miles per year compared to those who drive 15,000 miles or more annually. 

Nationwide provides usage-based insurance based on distance and mileage. SmartMiles is a per-mile option, while SmartRide is a telematics program. SmartMiles limits the miles billed in a single day to 250 — a welcome relief if you plan a long road trip. If you drive 300 miles in one day, you pay for 250 miles, not the remaining 50.

Policyholders who enroll in SmartRide can save up to 40% on their premiums based on their driving habits. To qualify for the discounts offered by this program, you must limit how much you drive, avoid hard braking and rapid acceleration, congested areas, and drive between midnight and 5 a.m. 


Root Insurance is a new digital car insurance company that focuses on usage-based telematics car insurance. This app-based company was one of the first fully app-based car insurance companies in the United States.

Rates are heavily influenced by how well you drive, with the idea of basing premiums on mileage and driving habits rather than demographic data. Drivers interested in Root car insurance must complete the company’s test drive trial before receiving a quote.


Metromile only offers pay-per-mile car insurance. This insurance option is well-suited for those who drive occasionally. The policyholder pays a low monthly rate and an additional fee based on the number of miles driven. 

Drivers can customize their coverage and choose from the standard options traditional insurance companies offer. To utilize the pay-per-mile option, you’ll plug a small device into your vehicle, which tracks and displays the miles driven. 

Your monthly bill is calculated as the sum of your monthly base rate and the number of miles driven. There is no charge for exceeding a certain number of miles in a single day, with a limit of 250 miles in most states and 150 miles for New Jersey residents.

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What Can I Do if I’m Not a “Low Mileage Driver”?

Although you might be spending less time behind the wheel, your insurance provider may claim you don’t meet their definition of a “low mileage driver.” Or, they might fail to offer this discount at all. 

If you fall into one of these situations, no worries. There are steps you can take to save.

  1. Reduce the number of miles you drive: If you’re hovering above the low mileage threshold, take steps to reduce your time on the road. Ask your company if they’re open to you working from home or engaging in a hybrid work model. You can also increase the days you take public transportation to work. 
  2. Talk to your auto insurance company: Discuss your current situation with your auto insurance provider. Let them know you’re driving less and see if this impacts your current rates.
  3. Switch to pay-per-mile insurance: Making the switch to pay-per-mile insurance can also help you have more control over the number of miles you drive while saving. With this policy, you only pay for the miles you drive rather than a set premium. 
  4. Opt for usage-based insurance/telematics programs: Another way to get a low mileage insurance discount is by using telematics. Insurance companies will monitor your driving behavior through an app on your phone or device installed in your car. The safer you drive, the lower your insurance rates will be. 

If you still don’t qualify for the discount, there are other ways to save money. Take measures to improve your chances of getting a better rate, such as waiting for tickets to drop off your driving record, raising your credit score, and carrying the right amount of insurance for your needs. 

FAQs About the Low Mileage Insurance Discount

How can I save on car insurance with low-mileage driving?

Low-mileage drivers may benefit from a mileage-based premium policy, as car insurance companies recognize those who drive fewer miles are less likely to have accidents. Companies usually offer discounts in the form of low-mileage discounts, usage-based discounts, or mileage-based policies. 

What type of discounts are offered by auto insurance companies? 

Most insurance companies offer a traditional low-mileage discount for those who drive less than 7,500 miles per year or less than 10 miles per workday. Some auto insurers also offer pay-per-mile insurance plans, which charge drivers based on the miles they drive yearly. 

What is pay-per-mile insurance?

Pay-per-mile insurance is a policy that uses tracking devices or apps to determine your mileage and then charges you based on the number of miles driven during a period.

What kind of insurance coverage can I get with low-mileage insurance?

Low mileage insurance policies include all the standard coverages offered by traditional insurance. Some usage-based insurance companies will offer optional add-ons such as roadside assistance or rental car reimbursement for an additional fee.

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