A simples guide

Low mileage car insurance

Ever thought of how you could save some money on your car insurance? Of course you have and you might even be tempted to take drastic action – like walk or cycle places just so you can use your car less and reduce your mileage. But does getting out and about on two legs or two wheels actually mean you can save money on your car insurance by getting a low mileage policy?

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Does driving less miles save you money?

It could do but your policy is made up of multiple factors – things like your age, where you live, your claims history and the car you drive. So whilst you’ll always be asked how many miles you do each year there are other important areas that determine the cost of your premium.

Too many miles, too few miles – getting it just right

As Goldilocks found, it’s good to get things just right and it’s the same for car insurance. Insurance is all about calculating risk and it stands to reason that the more you use your car and the more miles you drive, the more likely it is that you’ll make a claim compared to if you only pop to the shops once a week as there are more opportunities for things to go wrong. So it’s important to be as precise as possible about the number of miles you do so that your insurance provider can more accurately price up your premium.

Working out how many miles you drive isn’t just about picking a random number out of the air – it’s important to consider the reality. It’s simple to work out (that’s what calculators were invented for) just work out where you drive to each day and tot it all up – don’t forget to add weekends away – statistics from the Department of Transport show the average driver of a privately owned car in the UK racks up 7,500 miles annually.

You might drive fewer miles if you’re a student and only drive when you’re back home for the holidays or if you’re retired and no longer need to commute to work (lucky you). But while driving fewer miles can be a good thing for your car insurance, driving too few, could have the opposite effect. Driving less than say 1,000 miles a year could result in slightly higher costs because you’re seen as not practised enough and unfamiliar with the roads.

Are there any benefits of low mileage car insurance?

Depending on your policy, you might well save yourself some money not just on insurance, but on fuel as well; but there are other benefits too and not necessarily car related. Driving fewer miles and doing more journeys on foot or bicycle means reducing your carbon footprint and you get some exercise too. Saving money, being green and getting fit – what’s not to like?

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Consequences of claiming to be a low mileage driver when you aren’t

It’s easy to think that knocking off a few thousand miles won’t hurt – estimates are all about give or take anyway aren’t they? But remember, insurance is about risk and to work out an accurate premium, your insurance provider needs to know as much about you and your driving habits as possible.

If you make a claim and you get found out that your mileage estimate wasn’t at all accurate, then your provider might decide not to pay out. If you’re deemed to have knowingly misled your insurance provider in order to get a cheaper deal, then you could invalidate your policy, and you may struggle to get future cover with mainstream providers and your premiums could soar. As tempting as it might be to fib just a teeny, tiny bit, don’t give in – honesty really is the best (and only) policy when it comes to insurance.

Is there a way I can accurately measure the miles I drive?

Consider a telematics (or black box) policy. The ‘black box’ records the miles you drive, as well as monitors your speed, acceleration and braking. It’s the only way your genuine mileage will be recorded – many insurance providers stick on a few extra miles to an estimate just for good measure but telematics calculations are based on actual fact.

Your telematics policy price will be based on your data alone so if you’re a safe driver your premium will usually be reduced when it comes to renewal and if your driving isn’t as amazing as you thought it was, you will have accurate information and an opportunity to improve.

Of course an ideal way to know what’s right for you is to comparethemarket, so why not start your quote today

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