Annual mileage for car insurance: how does it affect the cost?

How many miles you drive in a year has a major bearing on the cost of your premium. So how do you work out your annual mileage for car insurance? And if you’re a low-mileage driver, what deals can you find?

Written by

Rebecca Goodman

Insurance expert

Last Updated

27 NOVEMBER 2023

4 min read

What is annual mileage for car insurance and why does it matter?

When you buy or renew a car insurance policy, you’ll have to estimate how many miles you drive per year. It’s one of the factors that car insurance providers look at when they’re deciding how much of a risk you are to insure.

The more you drive, the more likely you are to be in an accident and make a claim on your car insurance. It stands to reason that the higher your annual mileage, the more your premium is likely to cost. However, a study from 2018 suggests that some lower mileage drivers might be paying more for their car insurance than higher mileage drivers.

Will restricting my annual mileage lower my car insurance?

Having low annual mileage could lower your premium. That’s because driving less lowers your risk of being in an accident. But your insurance provider will consider other factors too, including your age, your postcode, your claims history and the car you drive.

When you compare quotes with Compare the Market, you can see how much lowering your mileage could save you. However, you need to be as accurate as possible when predicting your annual mileage because your policy could be cancelled if it’s wrong.

What is the best annual mileage for car insurance?

Unfortunately, there’s no magic annual mileage figure that guarantees a low premium. It’s up to each car insurance provider (and their teams of actuaries) to decide how your annual mileage should affect the price you pay for your policy.

The government’s Nati onal Travel Survey statistics show that UK motorists drove an average of 6,500 miles in privately owned cars in 2022. Some car insurance providers may give you a discount if you drive less than this, but it’s not a given.

Although a lower mileage might mean a lower premium, it’s only one of several factors involved in their calculations. For example, a young driver who only uses their car occasionally could still end up paying more than an experienced driver who commutes 50 miles to work every weekday from a safe suburban neighbourhood.

How can I work out my annual mileage?

If you’ve been driving for a while, there are a few simple ways you can work out your annual mileage:

Check your most recent MOT certificates, which will tell you how many miles you drive between each test.
Check your car’s service record. When your car has its annual service, the mileage is noted in your service book.
When you take out a new insurance policy, make a note of your mileage so you’ll be able to see how many miles you’ve driven when it comes to renew.

If you’re new to driving or your lifestyle and driving habits have changed recently, then you’ll need to do some calculations to get an accurate estimate of your annual mileage. Here’s how:

1. Work out how many miles you drive in the typical week, for example:

Your commute to and from your work or place of study.
Any regular errands you need to drive for, such as doing the weekly shop.
Social trips to see friends and family.

2. Multiply your typical weekly mileage by 52 to get your yearly estimate.

3. Don’t forget to add on some contingency for occasional trips like holidays, road trips to see distant relatives and unexpected errands.

It’s not an exact science, so remember to keep an eye on your mileage as the year progresses, and if it looks to be considerably under or over your estimate, get in touch with your insurance provider and let them know.

Can’t I just guess how many miles I drive?

No, it’s important to be as accurate as possible when estimating your mileage, so don’t just guess.

If you underestimate your mileage and need to make a claim, you could find your policy is invalidated and your insurance provider won’t pay out.

If it’s thought that you knowingly misled your insurance provider to get a cheaper policy, you may have problems getting cover in future. If you do, your premiums could be expensive.

Don’t overestimate your mileage either, as you could end up paying more than you need to for your premium.

Are there cheaper car insurance policies for low-mileage drivers?

There are some specialist car insurance policies for low-mileage drivers that could work out cheaper. You could be a student and only drive at home in the holidays, a parent who just uses the car for the school run or maybe you’re retired and no longer use your car to commute. Not only could driving less save you money, it’s a win for the environment too.

If you don’t drive much, you could save money by taking out a low-mileage car insurance policy. These can include:

Classic car insurance

If you drive a classic car and use it rarely, or only during the summer months, you might want to consider specialist classic car insurance. Please note that you can only compare insurance for cars manufactured after 1970 with Compare the Market.

Restricted mileage policy

Some specialist insurance providers offer discounted policies if you drive less than an agreed limited mileage per year. Be sure to compare these with policies offered by mainstream providers, though, to make sure you’re genuinely saving money.

Telematics insurance

Telematics insurance involves a device or app that monitors your driving, including recording your mileage. If you drive safely, you’re rewarded with a lower premium, and you may get a discount if you stick to your mileage limit.

Pay-per-mile insurance

Some insurance providers offer pay-per-mile – or pay-as-you-go car insurance – where you only pay for the miles you drive. You simply attach a tracker to your dashboard, which measures your daily mileage and tells you how much to pay.

Where can I compare cheap car insurance quotes?

Whatever your mileage, comparing car insurance with us is quick and easy, and it could save you time and money. Get a quote today to see how much you could save.

Frequently asked questions

What happens if I go over my annual mileage?

If you realise partway through your policy that you’ve gone over your estimated annual mileage – or you’re on track to do so – the right thing to do is to tell your insurance provider.

It might mean you end up paying more for your premium, but at least you’ll know your policy is still valid if you need to make a claim.

How accurately do I have to estimate my annual mileage for car insurance?

You’ll need to provide your car insurance provider with a reasonably accurate estimate of your annual mileage, but no one is expecting you to get it right on the dot. Car insurance providers usually look at yearly mileage in brackets, that typically go up in increments of 1,000.

If, partway through your policy, you realise that your mileage is going to be in a different bracket than you estimated, give your insurance provider a call. Even if you have to pay extra to adjust the policy to a higher mileage, it’s better than potentially invalidating your cover.

What’s considered low mileage for car insurance?

Different insurance providers have their own idea of what constitutes low mileage. A good rule of thumb is anything that’s below the national average could be considered low mileage.

The average number of miles driven in a private car in the UK has gone down a little since the pandemic. In 2022, the average was 6,500, down from 7,200 in 2019. But if you drive far less than that, you could be on track for discounted insurance.