If you’ve recently started working from home, your commute is now a thing of the past. What’s not to love? Fewer hours on the road means more hours in the comfort of your own home.

The problem is, if you’re like the average American, you’re paying an annual $1,566 for car insurance, on average. That’s a small fortune when you use your vehicle once or twice a week. Is it possible to negotiate lower insurance rates since you’re on the road less often?

Sort of. As always, the world of insurance can throw anyone for a loop. For that reason, let’s take a comprehensive look at low-mileage car insurance and learn how to save big.

Do Insurance Companies Offer a Low-Mileage Discount?

The short answer is an unequivocal yes. Some car insurance companies, but not all, will lower insurance rates based on your number of miles. Note that California legislation requires all car insurance companies to consider mileage in their quotes.

The catch is these discounts can vary wildly between insurance providers. In some cases, you may have to go through an approved mechanic or insurance agent every few months to provide proof of mileage. More commonly, you’ll insert a small electronic gadget into your vehicle which transmits odometer information.

Unsurprisingly, the discounts are as different as the measuring processes. But what is low-mileage car insurance, exactly?

What is Low-Mileage Car Insurance?

In most cases, low-mileage car insurance isn’t a type of insurance but instead a type of discount. The concept is simple: If you don’t drive very often, you’re less likely to get into an accident. That means less risk for car insurance companies who are sometimes happy to push the savings down to you through lower insurance rates.

But it’s important to realize mileage alone doesn’t account for your car insurance payments. It’s a small factor that’s part of the greater whole. With that in mind, what kind of discount are we talking about here?

On average, a driver who accumulates 5,000 miles every year will pay 8.4% less than another who reaches 15,000 miles. That’s in the ballpark of about $100 a year in savings.

Don’t think it’s worth the effort? Think again.

Some insurance companies have special low-mileage programs that are more than discounts, possibly leading to lower insurance rates. At the end of the day, your total savings will depend on your provider, low-mileage plan, and how much you drive.

Do You Qualify as a Low-Mileage Driver?

There’s no official benchmark that’s considered “low-mileage.” Different insurance companies will have various qualifications. Thankfully, they tend to fall in line with one another.

If you drive 5,000 miles or less every year, insurance companies should consider you a low-mileage driver. 7,000 miles is about the high end of the discount, but many companies honor this benchmark. Trivial discounts exist between 7,000 and 15,000 miles to the point where you may save $50 or less by the end of the year.

It’s worth negotiating if you want to lower your bills this year. It all adds up.

Low-Mileage Insurance Options

Not every car insurance provider will offer a low-mileage plan, but you should be able to land a discount. You may want to consider shopping around for other providers during this time. By doing so, you can find the best discounts and possibly lower your annual premium.

But low-mileage discounts aren’t the only way to lower insurance rates. Two other insurance options are readily available.

These come in the form of telematics insurance policies, also known as usage-based insurance, as well as pay-per-mile car insurance. 

What is Pay-Per-Mile Car Insurance?

Pay-per-mile car insurance isn’t a low-mileage discount. It’s a special type of insurance pricing created with low-mileage drivers in mind.

There’s still a small monthly rate regardless of your mileage. However, your monthly mileage will determine a tacked-on fee that caps out at 250 miles a day. A small device keeps your account updated at all times so it’s not a constant fight to update your information.

This type of car insurance is best for those well below the 5,000-mile mark. If you only drive your vehicle for emergencies or when public transit is down, then this is the car insurance for you.

MetroMile is the most well-known pay-per-mile car insurance company. Other car insurance companies have tried to get in on the action. However, they do more than track your mileage.

For that reason, they are known as pay-as-you-drive plans rather than pay-per-mile plans. 

For example, Snapshot from Progressive will give you a personalized rate. Your mileage plays a part, but so too does your driving habits since the gadget measures mistakes like hard braking.

Still, these personalized telemetry options may be worth a look depending on your coverage needs and odometer reading. You could stand to save more than with a traditional low-mileage discount. Keep in mind that egregious driving may increase your insurance premium instead.

Lower Insurance Rates From Home

There are plenty of reasons to not pay full price for car insurance when lower insurance rates are just around the corner. Oftentimes it’s as easy as discussing discount options with your provider. But if you rarely drive at all, you’ll likely save even more by considering getting a free quote for the pay-per-mile car insurance plan.

Of course, this isn’t the only strategy to save on car insurance. Check out these other ways to lower your auto insurance payments.