What is a low mileage discount and how do I qualify?
If you only use your car on the weekends for grocery shopping or the odd trip out of town, you’re probably qualifying for a low mileage discount already. Most insurers assume Canadians drive an average of 20,000km per year and offer low mileage discounts for people that don’t meet this threshold.
Perhaps you have a secondary car that is being insured as a regular one. A car kept in the garage for most of the year should definitely seek a discount. If only it could talk.
On the other hand, you might be choosing to curb your mileage simply because gas prices are so high, or you’ve gotten into the whole ‘bike to work’ thing.
Let’s see how to take advantage of your carless-but-still-have-a-car lifestyle!
What is the low mileage discount exactly?
Owning a car you only drive sporadically puts you at less risk of filing a claim than it would for someone who relies on their vehicle every day. Therefore, your insurer should be offering you a discount for the infrequent amount of time you spend behind the wheel. You’re not on the road every day putting you, your car, and other road users in danger.
Premiums are reduced 10% to 18% based on your driving habits with the low mileage discount. And, if you’ve suddenly started driving less (perhaps you’ve opted to walk more to work) and have now descended a usage category, you could save 5% to 15% depending on your insurer. This could save you $50 to $150 per year.
As an extra tidbit, some companies will offer you a low mileage discount if your car is new, with less than 3,000km on the meter, too.
How do I qualify?
First, keep track of the kilometres accumulating on your meter each month.
Look at your monthly totals, which may be more manageable. If you drive less than 1,600km per month, this is a good zone. That would put you at 19,200km per year, just under what the insurer assumes of you as an average Canadian driver.
If you can keep your vehicle under 19,000km per year, you’re likely in the running for a low mileage discount too. However, there’s evidence (from the US) that the threshold is even lower, at around 12,000km per year.
You need to ask your insurance agent or broker about the specific conditions necessary to qualify for a low mileage discount with their company; each provider is different, and this is an essential step.
Ask for concrete numbers, shop around, then see if it’s do-able for your lifestyle!