Average annual miles indicate the number of miles drivers typically travel during the year. You can casually use this number to determine whether a vehicle gets used less than or more than usual.
But car insurance companies use average annual miles data points as one factor that influences your rate. Why? Because the more you drive, the more likely you’ll be involved in an accident.
Understanding your average mileage per year and other driving habits can help you keep your insurance rates in check.
The United States Department of Transportation Federal Highway Administration said that the average person drove 14,263 miles per year in 2019. That’s roughly 1,200 miles per month per driver or about 39 miles per day. By comparison, the DOT said the average annual miles was 13,476 in 2018.
People rely on their cars because public transportation systems vary by location. Without vast public transportation systems to rely on for many Americans, cars allow many drivers to get to work, school, or recreation.
According to the United States Department of Transportation Federal Highway Administration, Americans drove more than 3.26 trillion miles in 2019. This number has dropped drastically since the COVID-19 pandemic forced lockdowns beginning in 2020. That’s when the DOT said the average miles driven fell 10.3%.
Your annual mileage directly affects how much you pay for car insurance. Motorists who spend more time on the road have a greater risk of filing an insurance claim than infrequent drivers who are less likely to have an accident.
Insurance companies use the number of miles you drive each year — along with other criteria such as age and experience — to predict your risk and set your premium accordingly. Typically, insurers ask about average annual miles when drivers apply for a policy. It’s best to make an honest mileage estimate for how much you drive.
While there might not be a legal consequence for underestimating your annual mileage on the application, it could become problematic if you get into an accident. The insurer will learn the vehicle’s mileage if a claim gets made. Some companies request odometer reading updates. Other carriers may perform random mileage checks to avoid “soft fraud” when figures reach below average miles.
Be sure to let your insurer know if your driving circumstances change. Having a shorter commute might produce a lower premium. For commuting, business, or pleasure, the type of driving you do affects how much you pay for car insurance coverage.
Commuting to work is the primary reason most people drive an automobile. “Commuting miles” is the term used for the number of miles it takes for a policyholder to get to work and back. Insurance companies use the figure to help determine whether an applicant’s annual mileage estimate is realistic.
Insurance carriers often allow up to 20 miles each way for commuting before increasing rates. Daily commuters who travel more than that might see higher rates because of additional time spent on the road, which often occurs in densely populated areas with higher instances of accidents.
Actuaries at insurance companies crunch numbers, predict the risk among policyholders, and set policy premiums accordingly.
The most recent figures from the DOT show significant differences in driving behavior exist according to gender and age group.
Infrequent drivers may find savings if they drive less than the average annual mileage. Insurers typically give the highest discounts to drivers who log less than 7,000 miles annually on their vehicles.
Low-mileage car insurance works by tracking miles electrically, either with a telematics device installed in the vehicle or through a mobile app installed on your smartphone. Premiums for this type of insurance involve a flat monthly rate and a small fee per mile.
Some motorists might have privacy concerns about the tracking, while others find the cost savings outweigh any perceived intrusion. Don’t worry, though; they don’t care about where you are driving to, just how many miles it takes you to get there.
Select insurers offer standalone low-mileage policies, or you can enroll in mileage-based discount programs through a standard insurance carrier.
What qualifies as low mileage varies with insurance companies. Check with your carrier for potential mileage-based auto insurance discounts. Reductions can vary by state, but driving fewer than average annual miles may bring about 3% in policy savings.
Other insurance based on vehicle usage can create savings of up to 15% by using telematic devices, similar to those used for pay-as-you-go low-mileage policies.
The COVID-19 pandemic boosted consumer interest in usage-based insurance policies using telematics. The increase in people working from home or unemployed and the cancellation of public events led to many cars parked in garages and driveways instead of being driven around town. Many owners looked at monitoring as a way to save money on vehicles not being used.
Some insurance companies promote usage-based insurance and telematics to monitor teen drivers and offer tips on vehicle maintenance and safe driving.
More than 228 million drivers create averages within the 50 states and the District of Columbia. In the District of Columbia, drivers travel about 7,000 miles annually, the lowest average in the U.S. Residents of Wyoming clock the highest with an average of more than 24,000 driving miles per year.
The national average annual mileage in 2011 was almost 4,000 miles less than the most recent average in 2019. This increase in miles driven per year impacts the way Americans choose to buy cars, too, choosing more fuel-efficient vehicles and electric vehicles.
In addition, when you sell a car, high or low mileage will impact the sales price, in addition to vehicle depreciation and a host of other factors.
Drivers who lease their vehicle must recognize how many miles they drive. Leases commonly have annual mileage allowances of 10,000 miles or 12,000 miles. However, high-mileage leases are available. This type of lease agreement costs more, allowing Americans to drive additional miles without exceeding their lease terms.
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