Your annual mileage can have a big impact on the cost of your car insurance premium. If you are a low mileage driver or someone who only drives occasionally, you could be saving money on your insurance premium by purchasing a low mileage car insurance policy.
This guide takes you through what low mileage policies are, how they work and who can benefit the most from swapping their regular policy to one of these instead.
In This Guide:
- What is low mileage car insurance?
- Who can benefit from low mileage car insurance?
- How to estimate your mileage
- Different types of low mileage policies
What is low mileage car insurance?
The cost of your car insurance premium is essentially based on the risk of you having an accident and causing the company to have to pay out. Low mileage car insurance will cost less as the less you drive, the smaller chance you have of being in an accident.
Of course, this is not the only factor that determines the cost of your insurance. Providers will also take into account factors such as age, experience and any previous incidents on the road. They will also bear in mind the fact that those who drive low numbers of miles may be inexperienced, under-confident and lacking in knowledge of the roads.
So what counts as low-mileage? The Department of Transport published findings that the average car in the UK drives 7,134 miles per year. If you drive less than this, you may be considered a low mileage driver and you could benefit from purchasing one of these policies.
It’s very important to remember that you should not lie about how many miles you drive a year. This is insurance fraud and if your provider finds out, your insurance will be invalidated. Many insurers do not provide low mileage cover due to this.
Who can benefit from low mileage car insurance?
So, who is it that may be looking to purchase low mileage car insurance?
- People who often choose to use public transport instead, particularly when commuting to work
- People who are close enough to their place of work to cycle or walk
- Students that leave cars at home during term time
- OAPs who travel less often or use public transport on a regular basis
- People who rideshare to work
- Members of multi-car houses where one of the cars is used less regularly
- Classic car owners
If you do fall into one of these categories or are interested in low mileage car insurance, you’ll need to accurately estimate your mileage.
How to estimate your mileage
An accurate estimate of mileage is essential so that your insurance provider can correctly calculate the price of your car insurance policy. Getting this right is important, not just for saving you money, but also to avoid invalidating your insurance by under or over-estimating. Providers will often compare estimated and actual mileage to check the accuracy of your estimation.
You can also change your expected mileage during your policy. However, this can come with a hefty admin fee, especially if you’re expecting that you’ll drive less than originally estimated and get cheaper car insurance as a result. The fee may cancel out any savings you have made by purchasing this policy instead of standard car insurance.
There are two fairly safe ways of calculating your mileage:
- If you think your travels will carry you a similar number of miles as they have done in previous years, then the easiest way to estimate your mileage for your provider is to check the car’s service record or MOT certificate. These documents will show you how far you drove in the year before that service.
- Alternatively, you can reset your short-term mileage meter in your car to see how far you go in a week and multiply it up to a year (by multiplying by 52, the number of weeks in a year). This can be handy if you’ve got a new car or moved to a new house and have a different commute.
Different types of low mileage policies
If you only use your car rarely, there are a number of different ways you can purchase a low mileage policy:
- Telematics: This is the most common way that insurance providers supply low mileage car insurance. There will be a base charge that covers theft and damage, whether from vandalism or accident. The provider will often ask you to pay for a base number of miles, that you can top up should you need to. They will fit your car with some sort of measuring device, such as a black box, that will monitor your mileage. This means you only pay extra if you go over your base mileage.
- Short term insurance: If you will only be driving the car for short bursts over the year, short term policies may provide you with a cheaper alternative. Insuring yourself for a few days or weeks at a time can save you money when compared to purchasing an annual policy. However, you’ll have to make sure you’re clear about whether it is declared as off-road as it’s illegal to have an insured car on the road even if it’s just parked there.
- Specialist policies: If you own a classic car that you only drive on rare occasions, you may need different or more comprehensive cover. It may be worth searching for and purchasing specialist policies that cover classic cars.
There are a number of different car insurance options to choose from if you fall into the category of a low mileage driver. Think about how you’re going to want to use your car and all the practicalities before purchasing cover. You can use our free online comparison tool to compare car insurance deals and find the right one for you.