Are There Car Insurance Discounts for Safe and Low-Mileage Drivers?

May 18, 2020
Keys sitting on a car's gear shift

Insurance customers are often eager to save money, and insurance companies have continued finding ways to help them lower their premium costs. One way that companies reward drivers who don’t log a lot of time behind the wheel is to give them low-mileage discounts for driving less.

The costs of premiums vary from state to state. Some states require insurers to factor in the estimated annual mileage when they set rates.[1] Why does this matter? In California, increasing estimated miles from 5,000 miles to 20,000 miles per year equates to approximately a 25 percent premium hike.[2] Insurance companies can make incremental increases for drivers who put more miles on their cars, although the differences are typically not as significant as in the Golden State.[3]

Still, saving money on your car insurance can help you out financially, and the idea of saving money by driving less is one that’s finding popularity with customers of all ages.

Measuring driving habits with telematics

One of the trends in insurance is the use of telematics, which is technology that measures and tracks driving habits.[4] An insurance company can use telematics to monitor drivers and can then reward them for good behaviors — or help them correct unsafe ones. If you sign up for this type of program, you install a small device in your vehicle (or use a mobile app) that tracks your driving habits and provides personalized feedback to you and your insurance company.

Discounts for safe drivers

Nationwide’s SmartRide program gives customers a discount just for signing up.

Once you install a small device in your car, or install the mobile app on your smartphone, it begins tracking your driving and measuring things like hard braking, nighttime driving, and fast acceleration – all of which can increase your chance of having an accident.

The information is transmitted for you to view right in the mobile app or on our website (for those who install the device in their cars). That way, you can take steps to improve your driving habits and make safer decisions behind the wheel. You might be surprised by what you discover about the way your drive. Safe driving can increase the amount of your final discount, which is locked in for as long as you have your vehicle insured under that Nationwide policy.

The program also rewards drivers who don’t accumulate a lot of miles on their vehicles. Because these drivers are on the road less, it makes them less likely to have accidents. Through the SmartRide program, drivers can save as much as 40% on their insurance.

Discounts for low-mileage drivers

If you drive less, there’s another potential way to save on your car insurance costs. Nationwide’s SmartMiles program offers the same coverage you find with traditional auto insurance policies, but your premium isn’t set for month. Instead, your cost varies based on the number of miles you drive. With this pay-per-mile insurance program, you pay a base rate and then a variable rate of a few cents per mile for every mile that you drive.

This option may make sense based on many factors. You might use public transportation to commute most days, work from home, or have a car that you don’t drive often but also don’t want to put into a vehicle storage policy. No matter your reason, if you don’t drive every day or drive less frequently, SmartMiles could be a cost-effective policy solution for you.

Driving fewer miles isn’t the only way to save money on your insurance, but it can help make your car insurance cost less. When combined with the value you gain from learning more about your driving habits and how to improve them, telematics can not only make your insurance less expensive, but it can also help you understand how to become a better driver.

*Availability varies; program criteria differs in California. Stated discounts are approximations. Discounts do not apply to all coverage elements; actual savings vary by state, coverage selections, rating factors and policy changes. Enrollment discount applies during data collection; final discount is calculated on driving behavior and could be zero. Final discount applies at the next policy renewal and is subject to change based upon actuarial support at subsequent renewals or with changes in drivers or vehicles on the policy.






  • Safety