Does mileage affect car insurance premiums?

Written by:
Geoff Tooze
Founder & Car Insurance

Do you know how many miles you drive annually? You’ll need to answer this question when applying for car insurance.

Insurers factor in your average annual mileage when calculating your car insurance quote. Not surprisingly, the more miles you drive, the greater the chance you will be in an accident and claim on your car insurance. That is why higher mileage drivers’ insurance premiums are more expensive.

This article explains how your mileage affects car insurance costs.

What is the average annual mileage for car insurance in the UK?

The average mileage driven in privately owned cars during 2022 was 6,500 miles; if this is you, you’ll be in the car insurance mileage band for drivers who drive regularly but not excessive distances.

Meanwhile, company car drivers typically drive further, with an average annual mileage of 12,700 miles during 2022.

Source – National Travel Survey statistics

What car insurance mileage band are you in?

Suppose you take out car insurance for the first time without a previous mileage history. You’ll need to calculate the average annual miles you expect to drive.

However, calculating your annual mileage will be much easier if you have been driving for at least one year.

Car insurance mileage bands in the UK

Car insurance companies assign you a mileage band to help them assess the risks associated with making a claim, which determines the amount of your insurance premium.

Here are the typical mileage bands used by insurers:

  1. 0-5,000 miles per year– The lowest mileage band. Drivers only use the car for short trips around town.
  2. 5,001-7,500 miles per year– The UK national average band includes drivers who typically do some commuting and short trips.
  3. 7,501-10,000 miles per year– This mileage typically includes those who drive daily for work and personal reasons but rarely travel long distances.
  4. 10,001-12,500 miles per year—Drivers in this band usually travel longer distances to work or take repeated trips, balancing everyday use with some extended driving.
  5. 12,501-15,000 miles per year– This band is for higher mileage drivers who use their cars extensively for work or leisure
  6. 15,001-20,000 miles per year– This mileage band often includes driving long journeys, such as long-distance commuting or business.
  7. 20,001 miles and above per year—This is the highest band and includes very high-mileage drivers, such as salespeople or delivery drivers, who face the highest premiums due to the increased likelihood of accidents.

Does mileage affect car insurance premiums?

A lower annual mileage usually means a cheaper car insurance premium. However, mileage is only one of many factors that insurance providers consider when calculating premiums.

Car insurance providers see lower mileage as less time on the road, reducing the risk of accidents and claims and, therefore, a lower risk.
Here are some examples of how a lower annual mileage can reduce car insurance premiums:

  • Reduced risk of accidents: The primary reason is driving fewer miles, and you’ll have fewer opportunities for accidents, which decreases the risk for the insurer.
  • Mileage-based discounts: Many insurance providers offer discounts to low-mileage drivers to acknowledge the reduced risk of having a lower annual mileage.
  • Telematics and Pay-As-You-Drive Policies: Low mileage drivers signed up for telematics/black box insurance policies that monitor their driving habits, including mileage, can also benefit from cheaper premiums.

Do car insurers check your estimated mileage?

Yes, car insurance providers can check your estimated mileage and have several ways of doing so.

Here’s how insurers might confirm your annual mileage:

  • MOT records: Your MOT records are accessible to insurers, which help verify your yearly mileage. These records include odometer readings from each test.
  • Black box devices: Many insurance providers offer black box insurance policies that monitor how you drive and include your mileage in real-time.
  • Claims and Renewal: When you claim or renew your policy, insurers often request your current odometer reading and can check it against the estimated mileage.
  • Service records: Service and maintenance records also include odometer readings, which are another way to check the estimated mileage.

Be accurate with your mileage and don’t try to mislead the insurer

Knowing that the average mileage affects your car insurance premium could be a tempting reason to underestimate the mileage on the quote. However, providing a low mileage to reduce your premium is a lousy idea. A minor difference probably won’t impact the price of your insurance, but a significant difference could have serious consequences. For example, if you need to make a claim and your insurance provider checks the car’s mileage, and the actual mileage is substantially higher than reported, you could invalidate your claim.

How do you estimate your car's mileage for an insurance quote?

For new drivers taking out their first insurance policy

If you’re a new driver or your driving habits have changed, estimating the miles you drive is a bit more involved. Calculate the average mileage for a typical week to include things like driving to work, university or college, socialising, errands like shopping, holidays, and longer road trips. You can visit our how-to calculate annual mileage for car insurance.

Where can you find your annual mileage after the first year of insurance?

As an existing driver after your first year of car insurance, you can find your annual mileage from various sources:

  • Odometer Reading – Check your car’s odometer reading every time you renew your insurance and subtract the previous reading from the latest. You’ll get the number of miles driven during the last twelve months.
  • Insurance renewal document – Your renewal document often includes a section about your estimated mileage from the previous year.
  • Telematics Insurance – If you have black box insurance (black box insurance), you can access your detailed mileage records through your insurer’s app.
  • MOT Certificates – Your car’s MOT test certificate records the odometer reading at each MOT test, giving you a reading. Comparing the readings from the previous year can help you find an annual mileage. If you misplace your MOT certificate, you can look up your mileage from the previous year on your MOT certificate. You just need the car’s number plate.
  • Car service records—Service and maintenance documents include odometer readings, which can help you determine your annual mileage.

Are there car insurance policies for lower-mileage drivers?

Suppose you drive fewer miles than the average and are looking for car insurance that reflects that you are less at risk of making a claim. In that case, several policies suit drivers with a low annual mileage.

Low mileage discounts

Some standard car insurance policies offer discounts to drivers who declare and stick to low annual mileage.

Black box insurance

A black box tracking device monitors how you drive, the time of day and mileage. Premiums will get lower if you drive well or fewer miles.

Pay As You Go insurance

It charges you for the miles you drive, which is ideal for occasional drivers. Payment is a fixed monthly fee to cover the car against theft and damage while parked, and you pay a per-mile rate based on your monthly driving miles.

Temporary insurance

Short-term or temporary car insurance is an option for those needing short-term coverage, typically from one hour to 28 days.

What other things can affect car insurance premiums?

Whether you only use your car when on holidays from university or commute five days a week, your annual mileage isn’t the only factor that can affect the cost of your car insurance. Your premium can also be influenced by other factors, with these having the most impact:

  • Job title
  • Make and model of vehicle
  • Postcode
  • Age
  • Overnight parking
  • Driving history
  • Adding a named driver
  • Voluntary excess
  • Modifications to your car

FAQs

What is the best annual mileage for insurance?
Many young drivers ask if there is the best annual mileage for car insurance. Unfortunately, the answer is no. Insurance companies look at many things when deciding insurance costs, such as age, the car you drive, and where you live, all of which can affect the price of car insurance.
Should you update your insurer if your annual mileage changes?
When you estimate your annual mileage, be as accurate as you can. Don’t guess. If you significantly underestimate the car’s mileage or it looks like you will exceed the estimated mileage, you’ll need to tell your insurance company.

Although a higher annual mileage might mean paying more (some insurance providers won’t charge any extra), you avoid any risk of invalidating your insurance. You’ll know your policy is still valid if you need to make a claim.

What happens if I overestimate my annual mileage?
Overestimating your mileage will likely result in higher insurance premiums; it will not make your policy cheaper. However, some insurance providers offer refunds for lower mileage.

Published: 3rd of June 2024
Updated: 18th of June 2024