Mileage is a significant factor that insurance companies consider when calculating premiums. The more miles you drive, the higher your risk of getting in an accident. Therefore, if you drive a lot, you can expect to pay more for car insurance than someone who doesn’t drive as much.
This blog post will explain how mileage affects your car insurance and what you can do to lower your premium. So, let’s get this show on the road.
How Mileage Affects Your Car Insurance
We’ll use a scenario to answer the question, “how does mileage affect my car insurance?“
You’re 25 years old and just bought a new car. You’re driving to work daily, which is about 30 miles round trip. You also drive on the weekends, running errands and going to see friends. So let’s say you average about 50 miles daily during the week and 100 miles on the weekends. That’s about 18,000 miles per year.
Now let’s say you’re 35 years old and have the same car. You still dr
ive to work every day, but you live closer now, so your daily commute is only 15 miles round trip. In addition, you don’t go out as often on weekends, so you only drive about 50 miles every weekend. That’s a total of just over 6000 miles per year.
How will your mileage affect your car insurance?
Insurance companies consider low-mileage drivers to be less of a risk and offer them a discount. However, if you drive significantly more than 7500 miles per year, you could be considered a high-mileage driver and see an increase in your rates.
Why is High Mileage Considered High Risk?
There are several reasons why insurance companies consider high mileage to be high risk. First, the more you drive, the more likely you will get into an accident. Additionally, the wear and tear on your car will be more significant, which could lead to more repairs.
As a result, insurance companies see high-mileage drivers as a risk since they’re more likely to file a claim. For this reason, they may charge you a higher premium or refuse to insure you altogether.
How to Offset the Increased Risk
If you’re a high-mileage driver, you’re probably thinking, “Great, now my insurance is going to be even more expensive.”
But there are some things you can do to offset the increased risk.
- Maintain a good driving record: While there’s no guarantee that the insurance company will offer you reduced rates, a clean driving record is the best way to demonstrate that you’re a safe driver.
- Reduce your mileage to less than 7500 per year: Many insurers offer a low-mileage discount if you drive less than a certain number of miles per year. Therefore, try different ways to lower your annual mileage, such as carpooling to work or using public transport.
- Consider other service providers: Don’t renew your policy with the same company every year. Instead, get quotes from different insurers to see if you can find a better deal.
These tips will go a long way in helping you reduce your car insurance rates. But remember, the best way to keep your rates low is by being a safe driver. Drive carefully and avoid accidents and traffic violations. If you do this, you’ll be sure to get the best possible rate on your car insurance.
How to Calculate Your Annual Mileage
With all this information, you’re probably curious how to work out your annual mileage to know what band you might fall into. The average person in the US drives around 14,263 miles a year, but there’s no one-size-fits-all answer. The best way to calculate your annual mileage is by using this simple three-step process:
- Find out from your MOT certificate: The certificate shows how many miles you’ve driven in the past 12 months. Therefore, you can use it to estimate how many miles you make every year.
- Check your car’s odometer: You can find out how many miles you’ve driven since your last MOT on the odometer.
- Check your car service record: After a car service, your annual mileage is noted on your car;’s logbook. You can use the figure to estimate your annual mileage.
When you know your annual mileage, you can start looking at how this will affect your car insurance and make the necessary changes.
Should You Guess Your Annual Mileage?
No, you should not guess your annual mileage. When applying for a policy, your car insurance company will ask you for an estimate of your annual mileage. They use this information to work out the risk of you making a claim. If you underestimate your mileage, your premiums could increase, and you may not be able to make a claim.
On the other hand, if you provide a figure way over your mileage, you could end up paying more than you need to.
Wrapping Up
Mileage is just one of the factors that car insurance companies take into account when setting premiums. However, it is an essential factor and one that you should be honest about.
If you are unsure how much you will drive in a year, it is better to overestimate than underestimate. This way, you will not have any problems if you drive more than you thought you would. Even better, find out the correct number and make an informed decision.
