Low Mileage Discount Explained

Today, people are looking for every way possible to save money. One way you can save a lot of money is to take advantage of low mileage discounts on your car insurance. These discounts prorate your insurance premium based on how much you actually drive during the year. If you drive a lot, then you pay the normal premium. However, if you only drive a little bit, then your premium rate is reduced.

How to Qualify for Discount

In order to qualify for the low mileage discount with your insurance carrier, you need to understand how it works. Generally, a low mileage discount is offered if you meet certain mileage cutoffs. For example, you can get the best rates possible if you drive less than 2,500 miles a year. In some cases this can save you over 50% on your automobile insurance. This is not to say that mileage is the only qualifying factor for these discounts.

Some insurance companies also offer low mileage discounts as a part of a corporate sponsorship or partnership. In these situations the driver not only has to meet mileage requirements, but they also have to be subscribers to special services. If you already are a subscriber to the service, then the low mileage discounts can save you between 13 and 54% off the average insurance premium for your situation.

Reducing Your Mileage

While it rare to only drive 2,500 miles a year, or a little over 208 miles a month, reducing your mileage even a little bit can help you to qualify for a low mileage discount. There are several ways to lower your mileage by 20 or more percent. To begin with, you can car pool once a week where you are not the driver. This will cut your monthly commute mileage by 20%. Another option is to use public transportation one or more times a month in order to reduce your annual mileage. These options can end up saving you hundreds of dollars a year, and they also help to contribute to a healthier environment.

Getting the Low Mileage Discount

In order to get the low mileage discount, you have to request it. A good approach is to meet with your insurance agent or to give him or her a call and to ask what you need to do to get the discount. You may have to provide a mileage log or fill out some basic paperwork in order to qualify for the discount. You may also need to prove that you subscribe to the qualifying service or provide other documentation to support your right to the discount.

Sources:

http://www.gmacinsurance.com/auto-insurance/smart-discounts/low-mileage-discount.asp