Drive less, pay less

Written by Penny Gusner on September 18, 2013 & Posted in Auto Insurance

Everyone is looking for ways to lower their car insurance rates. There are many ways to try and obtain discounted rates; one easy way is to drive less.

When you put fewer miles on your vehicle, you not only save on fuel costs and wear and tear on your vehicle, but many auto insurance companies will offer you lower premiums.

Insurance companies calculate auto insurance rates based on the risk you pose. If you drive fewer miles each year, there is less chance you'll be in an accident and that your insurer will be required to pay out on claims. This results in discounts being offered to motorist with low annual mileage.

For some companies, to obtain a low-mileage discount you have to drive less than 10,000 miles a year. With others it can be lower, such as 7,500 or 5,000.

If you've retired, have less of a commute, telecommute or otherwise have lowered the number of miles you place on your vehicle each year, then you need to inform your car insurance company. Otherwise, you'll possibly miss out on cheap car insurance rates because your insurer is unaware how low your annual mileage really is.

The discount for having low annual mileage differs by auto insurers but typically runs between 5 and 15 percent. You may be able to save even more if you decide to try out a usage-based insurance (UBI) program, which factors in mileage.

Progressive, State Farm, Traveler's, and Esurance, as well as other insurers, have UBI programs available to drivers (some are only available in select states). For usage-based plans, you get a discount for low mileage, but you usually have to install a telematics device into your vehicle so that the insurer can also monitor your driving behavior.

The hours you drive, how rapidly you brake and how fast you drive may be examined as well. If you're comfortable that you're a safe driver and would do well being monitored, then with a UBI program you could save up to 50 percent with certain auto insurance companies.

If you are stuck with a long commute and find your annual mileage doesn't get you a discount, don't despair. You may not be able to get a low-mileage discount, but you may still find a UBI plan that will give you discount.

And there are other ways to save. Comparison shopping is our No. 1 tip. When you shop around you're able to find the company that can best fulfill your needs for the best price.

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