Allstate low mileage car insurance
Got a car that sits in the garage most days? There are three ways to get a low-mileage discount that will give you cheaper car insurance:
A traditional low-mileage discount offers a break to drivers who rack up annual mileage under a certain threshold, such as 7,000 miles a year. In most states, according to data gathered for Insurance.com by Quadrant Information Services, the discount cuts the rates on a full-coverage policy by an average of 2 percent. (The savings are much bigger in California because of that state's laws.)
Companies may require periodic or annual verification of your odometer reading. Some may send you a form to fill in and may match your estimate against third-party readings taken from public sources. Others may ask an agent to verify the reading, or for you to take a photo.
Pay-as-you-drive models such as Snapshot and In-Drive use a telematics device to monitor your car, offer a potentially larger discount for people who drive less and very carefully. Ultra-cautious low-mileage drivers can save 30 percent or even more, but most drivers save less than that.
Most of these pay-as-you-drive programs offer a discount of 5 to 10 percent when you enroll, then use the data gathered to calculate a discount at your next renewal period. (See "Pay-as-you-drive discounts: A guide.")
Pay-per-mile car insurance
Insurance by the mile bills you monthly based on how much you drive. Only one company currently offers pure pay-per-mile coverage, and it estimates potential savings at 40 to 50 percent for those who drive less than 5,000 miles a year.
You get the same types of car insurance under each plan; instead of cutting coverage to save money, you're limiting the amount of risk the insurance company faces when you hit the road.
MetroMile, a company that specializes in pay-per-mile policies, pitches its policies to urban residents who don't drive much, especially millennials who have vehicles but often look for alternative transportation, from taking buses and subways to ride-sharing and cycling.
CEO Dan Preston says his company’s model is simple: The less you drive, the less you pay.
MetroMile follows the same general technology of Progressive's Snapshot, the best-known pay-as-you-go program. You stick a telematics device into the vehicle's onboard diagnostics (OBDII) port in the hope of getting a discount. Most cars from 1996 and later have an OBDII port.
The MetroMile Metronome device then tracks your mileage, which is used to set your rates.
Customers are charged a base monthly rate determined by individual rating factors: the driver’s age and location, driving record, type of car and, in some states, credit and insurance history. At the end of the month, the driver pays the base rate plus a per-mile fee based on the miles reported through the Metronome.
The per-mile fee tops out at 150 miles a day (250 in Washington state, making allowances for the occasional long trip.
The company is currently offering policies in California, Illinois, Oregon, Pennsylvania, Virginia and Washington.
Esurance, an Allstate company, has begun testing its own pay-per-mile offering. Esurance Pay Per Mile launched in October 2015, offering customers the chance to track their driving -- and, with any luck, cut their monthly bills -- via a small on-board device that sends drivers' mileage data to Esurance.
Eric Madia, auto products vice president at Esurance, said the company's pay-per-mile offering is meant to appeal to consumers who have flexible commuting options and consequently put fewer miles on their cars.
"With Esurance Pay Per Mile, our customers will pay largely based on how many miles they drive, whether that's 1,000 or 10,000 miles per year," Madia said in a written statement.
As of this writing, Esurance Pay Per Mile is available only in Oregon.
How is MetroMile different from Snapshot?
Progressive, Allstate and others who offer pay-as-you-go telematics-based discounts track mileage but also use their devices to monitor how carefully you drive. Hard braking is a big factor, and so is the time of day that you drive – late nights or heavy rush-hours could ding you. A few companies look at outright speed, but only ding you if you go faster than 80.
At renewal time, you get a discount off standard rates based on the company’s scoring system.
“Drivers who pose the least risk save the most,” says Des Toups, Insurance.com managing editor. “Pay-per-mile and pay-as-you-go programs are a way for insurance companies to seek out lower-risk drivers.”
For example, a 40-year-old man with a clean driving record buying full coverage for a 2014 Honda Accord in Camas, Washington, could pay as little as $907 a year for a traditional non-telematics policy, according to a Quadrant Information Services survey of major carriers. The same driver would pay MetroMile, by its own estimate, $24.18 a month for his base rate plus 3.2 cents each mile. At 12,000 miles a year, the cost would be $674; at 5,000 miles, the cost would be $450.
The cheapest traditional policy for the same Washington driver with a DUI conviction is $1,230 a year, the Quadrant survey finds. MetroMile estimates his rates at $1,056 a year for 12,000 miles and $884 for 5,000 miles.
Not first with the mile model
MetroMile isn't the first to offer car insurance tied solely to mileage. MileMeter, which was based in Dallas, is considered the first, but it closed operations in 2012, citing overwhelming competition from the major insurers and not enough funding to continue. Chris Gay, the entrepreneur behind MileMeter, stressed at the time that the per-mile model was sound and should eventually find a place in the insurance landscape, despite challenges by bigger companies.
That inroad may be the smartphone.
Metronome, which is GPS-equipped, also communicates with a MetroMile app you install in a smartphone. The app reads your car's diagnostic information and can relay your miles per gallon, how much the gas costs, how long you were driving and other weekly statistics. Preston adds that, over time, the app can track common routes and tell users which paths may be less congested, which saves the driver gas money.
The app can also alert customers if street-sweeping is scheduled in their neighborhood. The company says it has sent more than 18,000 of these alerts so far to motorists in San Francisco and Chicago.
In the 1960s and 1970s, many automobile odometers did not even read beyond 99,999 miles. Hit 100,000, and the odometer “flipped” or turned back to zero. But now, thanks to tougher quality standards and post-recession financial concerns, Americans are driving their cars longer than ever before, says IHS Markit, and high-mileage cars may now be the rule, not the exception. Is 200,000 miles the new 100,000 miles?
Do You Know What Your Check Engine Light Means?
Many situations can trigger your check engine light. Do you know what they are? When it comes on, do you know what to do? Find out here:Check Engine Light BasicsGet A QuoteGet A Quick, Personalized Insurance Quote Today.A great rate is just a few clicks away.Select Quote TypeGet a quoteRetrieve a saved quoteFind A Local AgentYour location is set forEditChange Zip CodeSearch AgentsMore Agents
The agent finder service is not reachable at this time. Please click here to find agents in your area.
The average age of light vehicles (cars and trucks) on U.S. roads increased to 11.6 years, according to IHS Markit. The trend of holding onto vehicles longer continued through the end of 2015. The average length of ownership was 79.3 months, more than 1.5 months longer than reported in 2014. For used vehicles, that number is approximately 66 months, and both are significantly longer lengths of ownership since the same measure 10 years ago.
“It used to be that when a car hit 100,000 miles, that’s the end of things. That’s no longer the case with regular maintenance,” said Carroll Lachnit, Edmunds.com features editor to Boston.com.
And the oldest vehicles on the road is the group that’s growing the fastest, according to IHS Markit. The number of vehicles 16 years and older is expected to grow 30 percent from 62 million units in 2016 to 81 million units in 2021. The research also indicates that more than 20 million vehicles on the road in 2021 will be more than 25 years old.
Is your car approaching 100,000 miles and maybe you’re looking toward 200,000? Consider these tips to help keep your car on the road
- Drive calmly. Aggressive driving, hard stops and starts, and rapid accelerating or decelerating may hurt your fuel economy, and also adds unnecessary wear and tear to your car. Rough driving may somewhat mimic stop-and-go city driving, which can put extra strain on your vehicle’s suspension and engine. Curbing your need for speed may help keep your car running longer.
- Keep it clean. A good wash will not only help your car sparkle, but it will also remove excess road debris like tar and salt. This is especially important during winter months when salt residue from wintry roads may cause undercarriage corrosion. Regular waxing helps protects the paint job and can help resist rust.
- Don’t ignore the check engine light. Some divers can end to overlook when their, check engine light turns on. If you have an older car, it’s especially important to get your vehicle checked out right away. It may be indicative of a serious problem with the transmission, timing belt or engine. Prompt attention can save you the headache and expense of a major problem that could’ve been resolved sooner.
What’s your mileage number? And how long do you plan to drive your car?
Originally published July 2012
A national consumer group says people who drive less aren't getting the price breaks they deserve from most of the big auto insurance companies.
A new study by the Consumer Federation of America (CFA) found customers who drive less than 5,000 miles a year may not get any discount at three of the five largest auto insurers – Farmers, Progressive and Allstate – unless they live in California, where mileage is required to be used as a rating factor.
State Farm was the only big insurance company that consistently gave a significantly lower price quote to low-mileage drivers.
"The failure of most major insurers to use mileage to help determine prices discriminates against lower-income and older drivers and in doing so also increases the number of uninsured drivers," said Stephen Brobeck, CFA's Executive Director. "This lack of concern for mileage, along with an emphasis on other non-driving factors such as occupation and income, help explain why insurers charge many lower income drivers such high prices for minimal, state-required liability coverage."
The insurance industry says it does not discriminate against anyone.
Steven Weisbart, senior vice president and chief economist at the Insurance Information Institute (an industry trade association), told NBC News that mileage may not be as important as some believe.
"Auto insurance companies want to get the best match they can between the premium they charge and the risk they assume," Weisbart said. "In some cases miles driven is a helpful factor, but experience suggests there are lots of other things that need to be taken into account."
Read MoreCutting car insurance rate may be as simple as asking