How does annual mileage affect the cost of car insurance?

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

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

Written by
Rebecca Goodman
Insurance expert
Last Updated
13 DECEMBER 2022
4 min read
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Why does my annual mileage matter?

The more you drive, the more likely you are to be in an accident and make a claim on your car insurance. So the higher your annual mileage, the more your premium is likely to cost.

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, where you live, your claims history and the car you drive.

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

How can I work out how many miles I drive?

There’s a few ways you can work out your mileage:

  • Check your MOT certificate, which will tell you how many miles you drove the previous year.
  • Check your car’s service record. When your car has its annual service, the mileage is noted in your log 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.
  • Check how many miles you drive each day and add them all up.

The government’s National Travel Survey statistics show that UK motorists rack up an average of 5,300 miles per year in privately owned cars. This is lower than the pre-pandemic figure of 7,400 and considerably down on the 2002 figure of 9,200. It seems, on average, we’re all driving a bit less these days.

Yet these are just average figures. If you travel a lot to visit family, for example, or you use your car every day, your mileage could be a lot higher. On the other hand, if you rarely drive and only use your car to go on holidays, for example, your mileage will be lower. That’s why it’s important to work out how many miles you drive in a year.

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. And 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 policies for low-mileage drivers?

Yes, there are, especially if you drive fewer than 25 miles a day. 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.

If you don’t drive much, you could save money by taking out a low-mileage 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 Comparethemarket.

Restricted mileage policy

Some specialist insurance providers offer discounted policies if you drive less than 25 miles per day. Be sure to compare these with policies offered by mainstream providers, 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.

And not only can driving less save you money, it’s a win for the environment too.

Where can I compare cheap car insurance quotes?

Whatever your mileage, comparing car insurance with us is a quick and easy process that 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?

Let’s say you’ve told your insurance provider that your annual mileage is 8,000, but it looks like you’re going to do 10,000 that year. 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 claim.

What’s considered low mileage for car insurance?

Different insurance providers have their own idea of what constitutes low mileage. But 8,000-10,000 miles per year is considered fairly standard, so if you drive far less than that, you could be on track for discounted insurance.

What is 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.

Should I consider mileage when buying a used car?

If you’re buying a second-hand car, it’s always worth considering the mileage.

You might assume a car with lower mileage is a safer bet, but one that does lots of short journeys and never has chance to warm up will suffer more wear and tear than a high-mileage car that’s spent its life on the motorway.

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